OneMain Financial: How to Secure the Best Interest Rates on a Personal Loan

Interest rates are an important consideration when searching for a personal loan. The rate that’s secured can drastically impact the cost of borrowing and the total amount that ends up needing to be repaid. This article will provide a few steps that applicants can take to help them find the best interest rate rates on a personal loan.

1-Understand and improve your credit score

An applicant’s credit score is typically an important variable in the approval process, and many lenders have minimum credit score requirements, although some may focus on the applicant’s overall financial picture. Applicants with less-than-perfect credit may want to take steps to help them build stronger credit over time, including:

• Paying off outstanding debt
• Paying bills on time
• Lowering their debt-to-income ratio
• Correcting any mistakes or errors on their credit report

2-Pay off outstanding debt

This is the simplest way to improve a personal credit score. Lenders look at debt-to-income ratios (DTI) when evaluating personal loan applications. DTI is calculated by dividing the applicant’s total monthly debt payments by their gross monthly income. Lenders may want to see a DTI that’s between 35% and 40% to approve a personal loan application, but there may be flexibility for applicants with a strong credit score.

3-Increase your income to improve your DTI

Paying off debt isn’t the only way to improve a DTI. Another option is to increase personal income. This can be done by asking for a raise or promotion at work, taking on a part-time job, or setting up a side hustle. Some examples of side hustles are freelance writing, photography, dog walking, and food delivery.

4-Find a cosigner if you need one

Sometimes, credit score and DTI just aren’t good enough to get approved for a personal loan. A cosigner could be the solution in those situations. This person can be a friend, relative, or business acquaintance with a better credit rating than the applicant. Cosigners take on the responsibility of repayment if the original loan applicant defaults.

5-Compare multiple loan offers

Higher credit scores and lower DTIs can help to increase the likelihood of personal loan approval from multiple lenders. Those lenders compete for business, so the rates and terms of each loan offer will vary. One of the best ways to get a lower interest rate is to carefully compare those loan offers. It’s also good to wait a day or two to see if any additional, potentially better offers come in.

The Bottom Line

Applicants can take several steps to help them secure a personal loan with a lower interest rate. These steps include looking to improve their credit score, paying off outstanding debt, and lowering their debt-to-income ratio. Considering a cosigner and comparing loan offers from multiple lenders can also help. The interest rates and terms will vary, so it’s important to read each offer carefully.

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About OneMain Financial

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OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.

Contact Information:
Name: Sonakshi Murze
Email: [email protected]
Job Title: Manager