Securing a low interest on a personal loan can help consumers secure significant savings. A
few actionable tips can put loan seekers in control of their interest rates and help them avoid
driving up their cost of borrowing.
Checking Their Credit Score
If the consumer has a good credit score, they'll be able to get low-interest rates on their
personal loan. In addition, consumers can check their credit scores online for free and examine
whether they can do anything to improve them.
When prospective borrowers seek a personal loan, it's important to compare interest rates from
different lenders. For example, consumers can use a tool like the one provided by Lantern by
SoFi to compare interest rates from multiple lenders.
Getting a Cosigner
If a prospective borrower has a friend or family member with good credit, they can ask that
person to cosign the loan. This will help the borrower get a lower interest rate on their loan
following the co-signer's credit score.
In this case, the borrower must ensure they make their payments on time, as missed payments
will negatively affect the co-signer's credit score.
Keeping a Low Debt-To-Income Ratio
One important factor that lenders consider when making borrowing decisions is the consumer's
debt-to-income (DTI) ratio. This ratio compares a prospective borrower's monthly debts to their
monthly income and gives lenders an idea of how much debt the borrower can afford to repay.
A low DTI ratio indicates that the consumer has a good disposable income and is less likely to
default on their loan payments. For this reason, it's generally advisable for consumers to keep
their DTI ratio as low as possible when applying for loans.
Here are a couple of ways to do this: consumers can either increase their income or reduce
Refinancing a Loan Can Get a Lower Interest Rate Elsewhere
It may seem strange to talk about refinancing a personal loan even before securing the initial
loan. However, refinancing is an option that offers consumers the flexibility to find a lower
interest rate in the future. Keeping refinancing in the back of a consumer's mind will help them
seek a lower interest rate if the economic and financial circumstances allow for better loan
Securing the Lowest Personal Loan Rates
Consumers with access to complete information can make the market's best choice. The
application that Lantern by SoFi provides allows prospective borrowers to conduct helpful
comparisons in three simple steps:
1. Provide information about yourself and the loan you need
2. Compare loan options from our trusted network of lenders
3. Apply for a personal loan with the lender of your choice
Finding the best personal loan option can require a lot of time and effort from consumers if they
have to manually compare the different available options. For example, Lantern by SoFi makes
comparing borrowing options and securing the lowest personal loan rates easy with a few
clicks. So, what are you waiting for? Explore your options and select a suitable loan to help you
fulfill your dreams.