7 Ways You Can Work Down Your Interest Rate

The lower the interest rate, the faster a loan is paid off. The math and the reality of this are pure and simple. That is why everyone wants to know what to do to get

7 Ways You Can Work Down Your Interest Rate

The lower the interest rate, the faster a loan is paid off. The math and the reality of this are pure and simple. That is why everyone wants to know what to do to get the best interest rate on their personal loans. They need to know any tricks of the trade as it were regarding lowering those rates. There are certainly some methods for making this happen.

Secure The Loan

A secured loan is a lot safer from the perspective of the lender than is an unsecured loan. Secured personal loans have some form of collateral attached to them that the lender is legally permitted to seize in the event that the borrower does not pay his or her loans back. Thus, the lender is protected in some sense if the money is never paid back.

The interest rate offered on a secured loan is likely to be lower than that of an unsecured loan, so check out what you can do to offer some collateral to give a lender a little peace of mind if you want a lower interest rate.

Work On Your Credit Score

Your credit score is the key to the kingdom as far as lower interest rates. The higher your credit score, the lower your interest rate is likely to be. The only way to pump up a credit score is through diligent work and on time payments towards debts. Thus, you need to consider the ways that you can remain on track when making payments on debts you already have outstanding. Pay more than the minimum payment if you are able to as well.

Show Your Work History

Bringing a little work history to the table never hurt anyone hunting for a better interest rate. The lenders know that the way that they get paid back is by someone with a strong and successful work history. Thus, someone showing a lengthy and strong work history and ethic may help lower their interest rate a little.


The more formal education you have, the lower you rate can be. Lenders know that statistically speaking those with a higher level of education tend to be more diligent about paying back their loans, and that is why they would rather lend to someone with more education if at all possible. Bring records of the highest levels of education that you have to work on your interest rate.

Agree To Auto-Pay

An auto-pay agreement means that the lender can take the money from your bank account in the pre-agreed amount and on a pre-agreed to date. This helps ease their minds a little as they know it will not be left up to you to go into their site and make a payment manually. Most lenders offer some kind of interest rate reduction for agreeing to auto-pay. It just makes their lending a little more secure and at the same time makes your life a bit easier as well. There is really no reason not to do it.

Bring In A Co-Signer

Perhaps your credit score and history is not stellar, but maybe you know someone who does have a strong history with credit. If so, then you need to bring them on as a co-signer for your loan. They can bolster your ability to get the loan in the first place, and they can certainly help with your interest rate. Again, the lender gets more comfort in knowing that there is something with a strong credit score that they can go after in the event that you do not keep up with your payments.

Compare Lenders

Finally, you should always compare lenders and the rates they have to offer before making a decision on which one to go with. There are a multitude of lenders available, and the easiest thing to do is pit them against one another to see how and where you can get the best rates. There is steep competition in the realm of personal loans, so it shouldn’t be a problem for you to find some willing participants to fight over their ability to lend to you. That is how you can find a better interest rate than you ever believed was possible, and that is how you make real progress.

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.