How To Lock In A Competitive Personal Loan Rate

With the cost of living rising alongside creeping interest rates, you are absolutely forgiven for asking how you can lock in competitive personal loan rates. Nobody wants to pay more for their loan than is necessary, after all.

Let’s take a look at some common loan rates, and how you can lock in the very best deal next time you’re searching for a personal loan.

Fixed Personal Loan Rate

A fixed personal loan locks in the interest rate (the amount a lender charges a borrower, being a percentage of the principal, or the amount loaned) at the time the loan is taken out and keeps it in place. This means that, even if interest rates rise, your repayments will remain the same, giving you financial peace of mind. The downside of this is that, on the chance that interest rates drop very low (as they did in early 2020), you won’t be able to take advantage of saving money during the life of your loan.

At Buddii Finance, A fixed rate can be very advantageous to you as a borrower, particularly if you’ve timed your loan well.  

Secured Versus Unsecured Loans

If you want to try and lower your personal loan rate, one of the best ways to do this is consider a secured loan over an unsecured loan.

If you opt for a secured loan, your lender will use your intended purchase (such as a caravan or motorbike) as a form of security against your loan. You can alternatively offer up collateral you already own, such as your car. With your “security” in place, personal loan rates are generally lower. The downside to this is that if you default on your payments, the lender may liquidate (sell) your security measure to pay off the remainder of the loan.

In contrast to secured loans are unsecured loans. This is what most personal loans are. An unsecured loan does not have any collateral attached to it, since personal loans aren’t always taken out to purchase, say, a new boat. Due to this, unsecured loans can come with higher fees. Keep this in mind when you’re shopping around for any type of loan.


How To Lock In Those Good Rates

Once you have your loan chosen, you’ll want to make sure you choose a good time to take out your personal loan. While larger loans such as mortgages can offer you a rate lock, the same cannot be said for all personal loans, so it pays for you to be smart about when you take out your loan and look around for competitive rates.

A fixed rate can be very advantageous to you as a borrower, particularly if you’ve timed your loan well. 

Whatever personal loan you choose, always be sure to read the fine print and understand exactly what your loan agreement entails. At Buddii, we’re upfront about our lenders rates and lending policies – so talk to us today, or give us a call on 1300 283 344.