- advertisement -

Before you apply for a personal loan

  • If you have a better option -- home equity, a credit card, 401(k) loan, a rich relative -- think twice before borrowing without collateral. But if you have no other way to go -- or are hell-bent on it -- take these tips.
  • Do your homework. Go to bankrate.com's (tm) current personal loan rate survey and find the best interest rates in your area or call up a handful of local banks and compare prices.
  • Ask if the interest rate is fixed or variable and what the rate cap is. Also inquire about annual fees.
  • If you belong to a credit union, forget tips 1 and 2 and just go there. Interest rates on unsecured loans can run about as much as one or two percentage points lower than major banks.
- advertisement -


  • If you do business with a community bank, take advantage of the human factor. Being a familiar face can earn you some slack if your credit background is smudged. Small banks might offer lower interest, too.

  • Be honest about why you want the loan. Your bank may be able to offer you a loan option you hadn't thought of, or perhaps that Jet-Ski you're eyeing can be used as collateral, thereby securing your loan and trimming interest.
  • Don't fill out applications at several banks and have all of them checking into your credit history. This can make you look desperate and lower your credit score.
  • Check our credit card rates. They could be a better bet.
  • Save some money for emergencies so you don't have to do this again. In the long run, it's cheaper.

-- Updated: March 19, 2004


BACK: Lump sums and credit lines    
top of page
Unsecured Personal Loan Basics


30 yr fixed mtg 3.85%
48 month new car loan 2.93%
1 yr CD 0.72%

Mortgage calculator
See your FICO Score Range -- Free
How much money can you save in your 401(k) plan?
Which is better -- a rebate or special dealer financing?

Begin with personal finance fundamentals:
Auto Loans
Credit Cards
Debt Consolidation
Home Equity
Student Loans

Ask the experts  
Frugal $ense contest  
Form Letters

- advertisement -
- advertisement -