Whether it’s a credit card, loan, mortgage or overdraft, the lower your interest rate, the less you’ll spend on interest. But with a few simple tactics, you could save money every month while paying off your debt.
1. Look at credit unions
Credit unions and smaller banks offer low interest rates compared with bigger banks. While you do have to be a member of the union and live in a specific location, you should be able to lower your interest rate.
2. Set up an automatic payment
Banks usually prefer you to set up automatic payments for personal loans, mortgages and car loans. This is because it shows that you’re more likely to pay on time and in return they could offer a lower interest rate.
3. Open a new account at a new bank
Some banks will offer lower interest rates for new customers so it’s definitely worth looking at changing accounts. Although it may seem difficult to switch accounts, it could save you hundreds of pounds.
4. Transfer higher interest loans
Moving your higher interest loans such as credit cards to personal loans with a lower interest rate could help you to pay off your debt quicker as you’re not paying as much in interest every month.
5. Improve your credit score
A high credit score is one of the best ways to get a lower interest rate. While there isn’t a quick fix to improving your credit rating, there are a number of things you can do that will help. Paying monthly bills on time and keeping good credit balances are just a couple of ways to improve your credit rating.
6. Research the competition
Do your homework and look at what other lenders are offering. There could be other companies with better interest rates and repayment methods.
7. Ask your lender
While it’s important to be reasonable, talking to your credit provider and asking for a lower interest rate might work. Explaining that you’re looking for a lower interest rate or will look at other providers is a fantastic negotiating method and could save you lots of money.
The less you spend on interest will not only have a positive effect on the total amount you pay but also how long it’ll take to pay off your debt.
Remember, taking time to research different rates offered by banks and providers can save you a huge amount of money over time. It’s also important to look into the terms and conditions of each type of credit and make sure you’re equipped with the appropriate knowledge before making a final decision.