The Cheapest Way to Borrow Money

by Bonnie Conrad ; Updated July 27, 2017
Get the best rate on the loan you need.

When you need to borrow money to buy a car, pay off debts or consolidate your bills, you want to get the best possible deal on the loan you take. The interest rates on the same type of loan can vary quite a bit, so it pays to shop and compare carefully. By seeking out loans from a variety of sources and comparing terms carefully, you can get the money you need at a price you can afford.

Step 1

Decide whether to borrow money from a family member or friend. Borrowing from friends and family is not always a good idea, but if you are confident in your ability to pay the money back in a timely manner, borrowing from family or friends will probably get you the best terms and the lowest interest rate.

Step 2

Request a copy of your credit report from all three credit reporting agencies by going to AnnualCreditReport.com. Avoid other sites that promise a free credit report but make you sign up for costly credit monitoring services.

Step 3

Review your credit reports carefully and notify the credit reporting agency of any discrepancies you find. An error on your credit report could force you to pay more to borrow money, or even cause you to be turned down for the loan you need.

Step 4

Contact the bank where you have your checking and savings account and ask to speak to a loan officer. You can often get a lower rate by working with a bank where you have an existing relationship.

Step 5

Use an interest rate comparison website, such as Bankrate.com, to compare interest rates for the type of loan you want. Contact the banks with the lowest rates and fill out a loan application. Compare your loan offers carefully and choose the one with the best rate.

About the Author

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance writer since 2003. Her work can be seen on Credit Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.

Photo Credits

Cite this Article A tool to create a citation to reference this article Cite this Article