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How to Get the Lowest Interest Rates

September 15, 2009 | Loans | No Comments
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In today‚Äôs tough financial world lenders are way more cautious in lending money.  To get the best rate when applying for a loan you must show that you are a low risk.

The best proof is your FICO score.  The higher your FICO score the lower your interest rate.  Your FICO score is the number used by most lenders to determine your creditworthiness.  

If your score is at least 760 out of 850, you will more than likely get the lowest rates.  A person with a 760 FICO score may pay 5.05% APR on a 30 year mortgage.  However, a person with a 670 FICO score may pay 5.67% APR on the same loan.  The difference in interest will be thousands of dollars over the life of loan.

To improve your FICO score consider:

  • Correcting errors on your credit report
  • Paying your bills on time
  • Reducing credit card balances to less than 20% of your limits

 

Additionally, to get the best rates consider paying a bigger down payment; 10% for a car, 20% for a house.

Related Article: How is Your Credit Score Determined?

Consolidate Your Student Federal Loans Now

August 7, 2009 | Loans | 1 Comment

If you are a former student with federal student loans (Stafford and PLUS loans originating before July 1, 2006), now is the perfect time to consolidate your loans.

Consolidating your loans will enable you to lock in the current low rates potentially saving your thousands of dollars in interest payments.  This may be your last opportunity to get these historically low rates.

Student loan consolidation combines federal education loans into a single fixed rate loan.  Rates have dropped last July 1st so now borrowers with Stafford loans who consolidate can lock in a rate of only 2%.  Plus loan borrowers can lock in at 3.38%.

Borrowers wanting to consolidate need to contact the Federal Direct Consolidation Loans program at the U.S. Department of Education by visiting LoanConsolidation.ed.gov.

Related Article:  Lower Your Student Loan with the Income Based Repayment Plan