Search
Home Blog Archive
Table of Contents

    Can You Get Better Loans With A Good Credit Score?

    Nathan J. Lee - 2019-01-20 14:16:13

    What are personal loans for good credit? These are loans that you qualify for at good rates and better terms, which is possible when you have a good to excellent credit score. 

    If you are a borrower with a score of above 740, which is a very good or excellent score according to the FICO scale, you can expect better loans than those borrowers with scores ranging between 670 and 739.

    With a better score, you can expect a personal loan with a low fixed interest rate and monthly payment. You can also borrow at attractive rates if you are looking to consolidate your debt or are considering a home improvement project.

     What Is A Good Credit Loan?

    • Low rate loans for good credit are personal loans that come with better interest rates and terms than ordinary loans.
    • You must have a good credit history and a stable income source to qualify for these loans. Lenders can set out additional criteria that determine the eligibility of borrowers for these loans.
    • Your credit score is another important factor considered by lenders in your application. Different lenders have different minimum score requirements for approval. Lenders use the scores listed by FICO to approve the loan applications.

    Here is an overview of the FICO credit score scale and the accompanying borrower classifications:

    • 800-850: Excellent
    • 740-799: Very good
    • 670-739: Good
    • 580-669: Fair
    • 300-579: Very poor

    The excellent and good category accounts for almost 42% of the population, with around 25% of them being in the very good category. The last two categories make up around 33% of the population. If you have a bad score, you can opt for personal loans for bad credit that are designed to help borrowers improve their scores over time.

    Accessing A Good Credit Loan

    If you have a strong financial situation and an excellent score, you can expect to qualify for a loan with lower interest rates and better terms. Here are some important points to keep in mind.1

    • Pre Approval - Lenders often give borrowers the chance to apply for pre-approval online. It can help you check whether you can qualify with that lender without a hard credit check. Remember, hard credit checks affect your scores, causing a small decline.
    • Shop Around - The calculation of interest rates and terms differ by lender based on their underwriting criteria. Accordingly, it is wise to look around for different lenders and understand each respective process. You can then compare quotes to finalize the best option.
    • Existing Debts - It is best to clear your existing debts first before seeking more financing. Obtaining approval for a loan will depend on your existing debts to an extent. If you have a low debt-to-income (DTI) ratio, this may translate to a better credit score which can boost your chances of approval.

    How To Choose A Lender

    When asking, “where can I get a personal loan with good credit,” the best strategy is always to review several lenders. Choosing the right lender is important if you are expecting the very best rates and terms. 

    Start by answering the following questions:

    • How much do you need to borrow?
    • How soon can you repay?
    • Do you want to opt for a pre-approval process online?
    • Do you have a decent score to expect a favorable loan?

    When seeking the best loan options for good credit, there will be several lenders that match your requirements. It is important to compare all your options so that you land on the financing with the best rates and terms. Do not forget about other important factors like origination fees, application fees, and prepayment penalties when deciding which loan offer to accept.

    The best option universally is to opt for a loan that delivers financing at the rates and terms that match your income.

    How Much Does It Cost?

    When you are approved for a loan and receive the funds your repayment period begins. This repayment will continue until you clear the debt. During this period, you will need to make regular monthly payments. 

    Part of the payment will go towards repaying the interest that accrues while the remainder will be used to reduce the principal balance. 

    Your credit score and income determine the APR (annual percentage rate) on your loan. You can expect a lower APR if you have a higher score. 

    How much do some of the best personal loans for good credit cost? Your actual loan cost will depend on factors like the loan amount, interest rate, and repayment term. You can use an online loan calculator to identify the exact amount you need to pay each month once you have learned the APR rates that will accompany a loan offer.

    Conclusion

    As a borrower, the best lending conditions are available if you have a good credit score and strong history. This will not only provide you access to great lenders, but you can also expect better interest rates and more flexible repayment terms. Higher credit scores also help you qualify for good credit loans with a higher amount.

    Before you sign on the dotted line, always compare the available options to select the most suitable option for your financial circumstances. Borrow only what you need, even if the lender is offering you more. Your financial situation can evolve over time, so it is always best to ensure you maintain healthy financial habits and avoid becoming overextended.