6 Tips for Getting the Best Personal Loan Rates in Texas

When applying for personal loans in Texas, you must ensure you get the best interest rate, as this will impact how much you will pay in the long term. As of March 2024, the average personal loan rate for a 24-month loan was 12.49%, according to the Federal Reserve Bank. You get a low-interest loan if the lender views you as a low-risk borrower, meaning you can repay the loan fully and on schedule. This article provides tips to help you get the best interest rates when applying for personal loans.

1. Check Your Credit Score

Lenders view your credit report to understand your current debt obligations and credit worthiness before approving your loan request. So, the first step to getting the best interest rate when applying for a personal loan is to check your credit report and score.

Credit ratings range from 300 to 850. A credit score of 700 and above is good, with anything above 800 considered excellent. You can learn more about your credit report by visiting AnnualCreditReport.com. If you notice any errors on your credit report, file a dispute to get your information verified or updated.

2. Take Measures to Improve Your Credit Score

If your credit report is less than excellent, improve it before applying for a personal loan. Of course, this will require time, but here are ways you can achieve this:

  • Pay your credit card balances: Your credit card debt is one factor affecting your credit score. Exhausting your entire credit card limit will lower your credit score, leading to a higher interest rate when applying for personal loans. Paying down your credit card balances (aim for 30% credit utilization or less) will help improve your credit score and give the best interest rate.
  • Limit your new credit requests: Limit hard inquiries for a while to raise your credit score.
  • Consolidate your debts: If you have numerous outstanding debts, consider a debt consolidation loan to pay off your debts.
  • Make your payments on time: Avoid late bill payments as this will hurt your credit score.

3. Compare Offers from Different Lenders

Don’t accept the first loan offer you come across. Instead, compare the interest rates and terms from different lenders and select the best loan offer. Contact different banks and credit unions and check out online marketplaces to get the best loan offer.

For example, Loanz is a reputable online loan marketplace that lets you receive multiple loan offers from a single application. This saves you time and effort that you will have used to apply for loans from different lenders. It lets you evaluate loan offers based on crucial components like fees, periods, interest rates, etc.

4. Opt for a Shorter Loan Term

Another way to lower interest rates on personal loans is by shortening the loan term—the quicker you repay your repayment amount, the less interest you will pay. Repaying your loan faster means you will regain your financial independence sooner and be free to focus on other financial obligations. Additionally, repaying your loan in a shorter time can help improve your credit score, which will help you qualify for better loan terms in the future.

5. Consider a Cosigner

If your lender lets you apply with a cosigner, it may be worth considering. Look for a creditworthy cosigner whose credit and income can positively impact your loan offers. They will also be legally responsible for your debt if you are late/default repayment.

A cosigner with an excellent credit history will not only boost your chances of qualifying for a personal loan but also receive a lower interest rate.

6. Raise Your Income (If Possible) or Deposits

Another way you can get the best personal loan rates in Texas is by increasing your income. If that’s not possible, increase the amount of money deposited into your accounts to grow your financial statement.

Also, consider other money sources, such as investment income, spouse’s income, etc., that may help you qualify for a better interest rate on personal loans.

We Can Help You Get the Best Personal Interest Loan Rates in Texas

Qualifying for a personal loan in Texas is one thing, but getting the best personal interest loan rates is entirely different. At Loanz, we can help you get the most affordable personal loan in Texas.

Whether you need a wedding loan, vacation loan, business loan, moving loan, or home improvement loan, our platform allows you to quickly compare multiple loan solutions and select the one that favors you. At Loanz, we connect to the best lenders in Texas and around the USA to ensure you get the most affordable personal loan.