Low interest personal loans are almost unheard of these days although if we consider the interest rate history in the last 20 years, any personal loan would seem like low interest in 2000 – 2001 where interest rates were around 20-23% and that was bond rates. Can you imagine what the credit card and personal loan interest rates were (around 35%).

This of course is of little concern to those needing short term loans to deal with an issue right now, I just wanted to put it into perspective and illustrate that interest rates move constantly.

Low Interest personal loan

personal loanThe best way to get a personal loan at a lower interest rate is to reduce the banks risk of getting repaid and how you do this is by offering some for of security for the loan. This could be in the for of a cession of a Life Insurance that has a cash value or something of value that the bank could easily convert to cash in the event of a default on your part. Kruger Rands, Gold coins or other similar investments would be an excellent way to insure that the interest rate you got on your personal loan was as low as possible.

What a lot of people neglect to do is to negotiate the rates. If you do not ask for a better interest rate the bank will not give you one, so ask for a better rate on the basis that their risk is reduced or almost nil if you secure it.

Banks and other financial institutions will not necessarily offer short term loans in that it is not their business. The banks and major financial institutions want to lend money over longer periods of time and the way they would likely approach a short term loan is to increase your overdraft for a period which reduces monthly.

Unsecured personal loan

An unsecured personal loan is best taken up with specialist short term lenders that offer loans ranging from a few hundred Rand to less than R10 000. If you wanted a R7000 loan over 6 months to settle something that is very important, then a specialist lender would offer you an unsecured personal loan for a few weeks/months but at a much higher interest rate.

These unsecured lenders all have websites where you can make your short term loan application online and get a very quick answer. Always remember to read the small print when entering into any loan agreement.