Low Loan Rates
Lenders only offer the cheapest loan rates to the best customers. This means that the applicant will need excellent credit, a low income to debt ratio and a stable job. In the current financial climate, uncertainty will lead to a low APR loan rejection. Banks are seeking to avoid bad debt and protect their balance sheets. Until unemployment returns to a more sustainable level, the lending terms will remain stringent. A number of lenders have temporarily withdrawn from the market.
Low Interest Rate Loans Require Excellent Credit
A financial institution will use credit scoring to determine the likelihood of the borrower defaulting. Lenders will report to credit reference agencies regarding whether payment has been received punctually. Missed and late payments will cause a credit score to go down and make borrowing more difficult. An unsecured low cost loan will only be offered to customers with a good credit rating.