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How to find the best unsecured personal loan rates for your business

The riskiest situation entrepreneurs find themselves in is running the business with inadequate or lack of funds. They have to pay their members of staff, buy company equipment, etc.
In situations like this, entrepreneurs opt for unsecured personal loans to keep things going. Although unsecured personal loans come with higher annual rates and are not easily granted if you have a bad credit history, or you don't have a successful business record.

Getting an unsecured personal loan at very good rates rarely happens, mostly because people don't know where to get it.

Below are six tips that will help you find the best unsecured personal loans at the best rates possible.

1. Check online

Everything is on the internet – including digital lenders.

Just type in Google search "digital lenders", include your city and country, you'll get lots of search results and lots of them will have better rates to offer because they are many, making the loan rates more competitive than their brick-and-mortar counterparts.

However, be careful of the digital lender you go with, not all of them are genuine. Look carefully through their terms so you don't fall victim of a bad loan rate.

2. Peer-to-peer

Peer-to-peer lending is now popular, thanks to crowdfunding. There are different websites that allow individuals make personal loans to people at different rates, depending on their credit worthiness and length of the loan.

It is however more favourable – unlike traditional banks who don't favour people with less-than-stellar financial history – to people who have bad credit history or low success records in their business.

3. Retail banks

The first thing that usually comes to the mind when thinking of getting the best unsecured personal loan rates is the retail bank.

However, most people already have the mindset that banks offer loans at higher rates compared to offers you'll find elsewhere. This isn't totally true and you can find unsecured personal loans at affordable rates from smaller banks - since they’re usually in need of more customers.

The con to this is that it requires a lot of documentation and largely depends on your good credit history or success history of your business. Asides that, it's totally worth it.

4. Online reviews

In a bid to get a personal loan lender with affordable rates, you might be willing to go with a lesser-known lender. As good as this seems to be, it can also turn out sour if you fall a victim of online scammers.

To avoid this, Google the lenders you wish to borrow from and see what people have to say about them. If you see anything positive or negative, investigate – especially the negative.

5. Cash advance

There are credit cards offering cash advance at a 0% introductory rate. Free money, there's nothing better.

However, that rate only lasts between 6-12 months, so you have to be sure you can refund the money within that timeframe.

Be aware that the interest rates on credit card balances are higher than that for personal loans, so if you can't pay back the loan within the period when the intro rate is in effect, don't borrow it all.

6. Credit union

Credit unions are non-profit financial institutions who give out loans at lower rates and more flexible terms than other lenders -- once you become a member.

The credit union should be your first stop if you're looking for a small personal loan for your business.

The bottom line is that though the bank is the first option that comes to mind, they aren't the best source and there are other lenders out there, willing to give out personal loans at affordable rates.

Terms vary, so be sure to check out other institutions before accepting any loan so you don't miss out on the juicy ones.

22 Nov 2017 16:35