10 Tips To Finding The Best Bank Rates

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)
4. Consider online banks- There are many online banks now-a-days that typically offer good interest rates.

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.


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