Lowest APR Loans Require Excellent Credit Scores: Cheapest Rate Loans for Good Credit Ratings

The cheapest rate loans save customers money as they reduce the profit margin that lenders enjoy. In order to avoid bad debt, lenders use a credit scoring process to determine the likelihood of the borrower defaulting. Customers who have an excellent credit score will be approved for the lowest APR loans because those who fall into this category rarely experience difficulty repaying debt. Borrowing money from banks and person-to-person lenders will prove far more affordable.

Advice Before Applying for the Lowest APR Loans

  • Before applying for the cheapest APR loans, always request a free credit report and check it for errors. A surprising number of reports contain erroneous information. Provided that the appropriate supporting information is provided, the Fair Credit Reporting Act gives that person the right to get any mistakes corrected.
  • Avoid making multiple applications for the cheapest rate loans. Whilst it may seem logical to do so, it sets off alarm bells amongst both banks and person-to-person lenders. This is because it is perceived as a sign of financial difficulties or event fraud.

Cheapest Rate Loans from Person-to-Person Lenders

An excellent credit rating (760+) means that peer-to-peer lenders, such as Zopa and Prosper, will offer the lowest APR loans. Borrowing money from banks doesn’t appeal to all consumers, but the above providers offer an alternative. Through an intermediary, people provide low interest rate unsecured loans to other people.

  • Prosper.com. This peer-to-peer lender offers low rate unsecured loans for fair (C), good (B) and excellent credit ratings (A* and A). The limit is currently $25,000. The applicant writes a proposal and lenders are able to bid against each other to bring down the interest rate. (U.S. customers). Low interest loans are currently available.
  • Zopa.com. Borrowers are also categorised in accordance with the risk of default that they present to lenders (A*, A, B, C and young market). Although the APR is higher, they offer loans for good credit to young customers. Excellent credit loans (A*) currently start from 10% APR.

Borrowing Money from Banks with an Excellent Credit Score

  • Use comparison websites to trawl the market for affordable loans. Rather than applying too often, be selective. The lending criteria are always clearly stated so an applicant with an excellent credit score has a high probability of being accepted for the lowest rate loans.
  • Customers who have an established relationship with an existing bank have a far higher chance of receiving approval. Lenders dislike customers who have no credit history almost as much as they do those who have failed to maintain their repayment schedule. An existing customer will have a proven track record and may even have pre-approved offers available.

Approval for Loans for Good Credit Score Ratings

Although more expensive than they were a few years ago, an affordable loan saves the customer money. Even in a bad economy, applicants who have an excellent credit history stand the best chance of loan qualification. This is because banks and person-to-person lenders not only need low risk customers, they also want to cross-sell other financial products and services. Perform a cheap rate loan comparison and only submit an application when the lending criteria are indicative of success. Making too many credit applications will be construed negatively by all prime credit lenders.