How to Get an Unsecured Loan at a Low Fixed Rate

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By eHow Contributing Writer

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Unsecured loans are personal loans with no collateral. These loans are usually granted at higher interest rates than secured loans, such as mortgages or car loans. It is possible to obtain an unsecured loan at a low interest rate if you are credit savvy and follow these steps.

Difficulty: Moderately Challenging

Instructions

Step 1

Know your credit score. Customers with higher credit scores are offered better rates. Several websites exist to help you understand your credit worthiness.
Step 2

Start with your local bank. Banks offer preferred rates to existing customers. Ask if they can reduce the rate further if you are using direct deposit with them.
Step 3

Call your credit card company, especially one that you have been with for a long period of time. They want to keep you as a customer by giving you a premium rate.
Step 4

Use your credit card's "cash advance" checks to write a check to yourself. Cash advance fees and higher rates apply. However, you will be transferring this balance to a low fixed rate in Step 5.
Step 5

Select another credit card from a separate bank which offers a low fixed rate for the life of the loan. Immediately arrange a balance transfer to the card with the low fixed rate. Maintain this transferred amount as the only balance on the card.

Tips & Warnings

Ensure your credit card is offering a low fixed rate for the entire life of the loan. A short-term low rate, known as a teaser rate, can be costly when the introductory term is over.
Only use Steps 3 through 5 if you have exhausted your other options. Cash advances and balance transfers carry significant risk and can impact your credit score. Only proceed with the cash advance if you know you can transfer the balance to a low fixed-rate card.
Cash advance fees on credit cards are high. The interest on these advances is revolving, not fixed. You must transfer this type of balance to a low fixed-rate card immediately.

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