About Me

Investing Your Money Properly

I still remember the first bad financial decision I ever made. My seven-year-old buddy told me that if I lent him a few dollars, he would pay me back ten a few weeks later. Unfortunately, he forgot all about his debt, and I was left without my allowance. Although it might seem like a silly example, bad financial decisions like that one plague adults everyday. I have had my fair share, and so I decided to create a blog dedicated to helping you to invest your money properly. Before you take your hard-earned money and throw it at a cause, think about the advice on my website to make a great decision.

Investing Your Money Properly

Four Things You Can Do To Obtain A Lower Interest Rate On Your Next Loan

by Penny Evans

When taking out a loan, you want  to secure the best terms possible. One of the most important terms of the loan is the interest rate that you pay for borrowing the money.

The lower the interest rate, the lower your cost for borrowing the funds. A lower interest rate also results in lower monthly payments. If you are unhappy with your proposed interest rate, here are a few things you can do to get a lower rate.

1. Check Your Credit Report for Errors

Your credit history is one of the most important factors that the lender uses to calculate your interest rate. It only makes sense to take steps to ensure that the information is accurate.

You can request a free credit report from each of the major credit bureaus once a year. Review the report to make sure there are no inaccuracies, such as accounts that do not belong to you or reports of missed payments that you know you actually paid on time. If you see anything on your report that does not look correct, you can dispute it with the credit bureau. 

2. Pay Down Any Maxed Out Credit Cards

Many lenders look at your debt utilization when determining your interest rate. Ideally, try to keep the balances of any of your credit cards or revolving lines of credit less than 30 percent of the card's limit. For example, if your credit card has a limit of $1,000, keep the amount that owe on this card less than $300.

3. Apply for a Secured Loan

A secured loan is a type of debt product secured by collateral. This means that if you default on the loan, the lender can seize the property to cover the amount that you owe. Mortgages, home equity loans, and auto loans are all common types of secured loans.

If you are not looking to purchase one of these items, but instead need to obtain cash, you can explore secured loans that permit you to refinance your existing loan and take cash out. These loans are available when you have equity in the property (you owe less than what the item is worth). For example, if you have a home worth $200,000, but you owe $150,000 on it, there is $50,000 in equity that you can borrow against.

4. Reapply for the Loan with a Credit-Worthy Cosigner 

If your credit is sub-par, one way to obtain a lower interest rate is to apply for the loan with a credit-worthy cosigner. Instead of basing the loan terms solely on your information, the lender will take both parties' information into account.

For more information, contact companies like First Mortgage Company, Inc.