What are low APR loans?

Low APR (annual percentage rate) loans are loans that can cut a lot of interest from the loan payments that borrowers make over time.

These loans are typically granted to individuals with good credit records or to those who can provide a certain amount of collateral.

How to get low APR loans:

Display creditworthiness

Keep in mind that having a low credit score means that you are a risk to lenders. Lenders consider you as an individual who is more likely to default on payments.

Find ways to improve your credit score.

Make sure that you repay all your outstanding debts. Check your credit score and make sure that you follow up on correcting any discrepancies.

Create a budget and a debt repayment schedule.

By creating a budget you will gain better control of your finances. This may help you avoid overspending or applying for credit cards that you don’t need.

Provide collateral

Secure your loan with assets (your home or car). These secured loans come with lower interest rates because the lender is protected from loss.

Consider a variable rate loan.

Fixed rate loans don’t always have the best interest rates. You could get low APR loans by opting for a variable rate loan instead.

Get a co-signer.

A friend of family member with good credit could co-sign with you on your loan. This individual needs to have a good credit record and should be willing to pay the loan on your behalf if you are no longer able to. By getting a co-signer, you may be seen as less of a risk to a bank or financial institution and you may qualify for low APR loans.

Shop around for loans

Make comparisons between at least five different lenders, to find the best interest rates.

Evaluate your lending options

Consider getting a loan from another institution other than a traditional lender such as a bank. You could get a loan from a credit union or from a micro lender.