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What steps should you take to find the best bank interest rate, given that banks are always competing for your loan business? Here is a list of steps to assist you in finding the bank that will provide you with the best possible interest rate.
1. Get a copy of your credit report - When looking for any type of loan the first step you should always take is to request a copy of your credit report and verify that it is correct.
2. Fix any discrepancies - If there are any discrepancies on your credit report be sure to take the necessary steps to fix them.
3. Gather together your proof of income - when applying for a loan your loan agency will want a copy of your documents including:
- your driver's license
- your social security card
- proof of employment
- copy of a utility bill (not all banks require this)
5. FDIC insured - Make sure any bank you decide to work with is FDIC insured.
6. Loan locator -A great way to find the best possible bank interest rate is to use a loan locating service. A loan locator will "farm out "your loan and usually get you several responses from a variety of bank that are competing for your loan.
7. Check financial rate sites for the current best bank rate - A good example of this is mortgage101.com. These services compile bank rate information for financial products including mortgages and car loans.
8. Investigate the financial status of your bank - Be sure to check the financial condition of any loan agency you consider working with. A good source for this information is "asfe and sound". While finding a bank that is going out of business may sound like a good way to get a loan that you wont have to finish paying back, what typically happens when a bank is closing is they sell their loans to another financial institution and these other loan agencies will typically charge you a higher interest rate.
9. Find a bank that offers you a low fixed interest rate - A low fixed interest rate will always be a smarter choice then a variable interest rate. Even though the initial rate may be lower than a fixed rate loan the rate can climb dramatically over a period of a few years and bring your monthly payments with it. The increase in monthly rates in the case of a mortgage can amount to $500 or more a month. This scenario is what has caused such a huge amount of home foreclosures recently, so protect your self with a low fixed interest rate.
10. Negotiate with your bank- While it may seem that the interest rate your bank is offering is fixed, your bank may be willing to negotiate with the interest rate a little, particularly if you are an established customer.
