Top Tips on How You Can Get the Best Interest Rates for Your Loan

There are plenty of tips out there on how to get the best interest rates for your loans, so we've compiled the best ones for you right here!

Shopping around for the most attractive interest rates is the obvious move to make for most people looking for a loan. Lower interest rates mean you pay less every month and you reduce your total debt amount faster. To that end, we thought it would be useful to share with you some essential tips to follow when looking for the best interest rates for your loan.

1. Know What to Shop Around For

Before you even go looking around for the best interest rates, take some time to really consider the kind of product that suits your situation best. If the amount you need is only a little more than your current monthly salary, perhaps a credit card would work better. Or if you’re looking for funds to start a business, a business loan would be more appropriate than a personal loan. Both these options are better alternatives for their purpose because they would be cheaper, have features that suit their intention, and in many cases, would offer more attractive interest rates than personal loans.

2. Know Where to Shop Around

Calculating interest rates can be confusing and getting the right information from different lenders’ websites can be challenging. What you can do is use a comparison site like RinggitPlus. Sites like ours often have a helpful loan calculator for you to find out exactly the kind of loan from which bank that can offer you the best deal for your needs.

3. Don’t Apply for Multiple Loans or Credit Cards

Each time you apply for a new loan or credit card, it counts as a hard inquiry in your credit report. If too many of these appear too close to each other in your credit report, it might indicate to lenders and banks that you’re a high-risk customer, short on cash or getting ready to rack up a lot of debt. This in turn, may affect the interest rate you’ll get when you apply for a loan.

4. Make Sure Your Credit Score is Healthy

Speaking of credit reports, be sure to check your credit score via CTOS to ensure that you’re in good shape. If it doesn’t look that good, lenders and banks might offer you a lower interest rate. Remember to pay all your credit obligations on time and avoid missing payments.

How Do I Check My Credit Score?

An easy and convenient way to do this is to visit the CTOS website and sign up for a CTOS User ID online or via their mobile app.

If you aren’t familiar with CTOS, it’s a credit reporting agency that helps to compile and provide credit information in Malaysia. It offers the MyCTOS Score report - a comprehensive credit report that can help you understand your credit health better and help identify the areas you need to work on to improve your creditworthiness.

A MyCTOS Score report contains your personal details, CCRIS records, directorships, legal action records, the number of times you’ve been searched, as well as your CTOS Score - a credit score that ranges between 300 (lowest) and 850 (highest).

You can find out more about MyCTOS Score report and sign up for your CTOS User ID at ctoscredit.com.my. Have you gotten your MyCTOS Score report before? Did it help you understand your credit health better? Share your thoughts and experience with us in the comment section below!

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Agree or disagree with this post? Questions? You also have your word!

  • Yee yik kee

    Persoanl loan

    Reply
    • Allan

      Hi, I was offered by UOB for permanent credit limit increase (credit card). I'd like to know if this will affect my future credit score for obtaining other financing i.e. housing loan, biz loan etc. P/S: I currently hold cards from two card issuers and recently, I just submitted new application for credit card from a new card issuer (different banks of those I own).

      Reply
      • RinggitPlus

        Hi, Allan.

        An increase in credit limit will not affect your credit score as it lowers your credit utilisation ratio. However, this does means that you have more credit to use for purchases. If you manage your credit limit well, it will not be an issue. However, if you almost maxed out the limit, then you will have a huge credit card debt to pay.

        Thanks for the question and we hope this help.

        Reply
      • Allan

        Thank you for the reply. Do banks take the current credit limit that's been granted and apportion out the next available credit limit for the loan application? Say a person is worth RM100,000 of credit but currently he/she has credit cards total amounting to RM50,000 credit limit, so the bank can only grant the balance of RM50,000 credit limit to this person? Or the case would be that the bank will sort out how much debt/ credit's been utilised, then grant the next available credit/ reject the credit application? If credit limit amount is indirectly proportion to credit utilisation ratio, does that justify it's good to have higher credit limit? That's if a person is discipline to manage the credit well?

        Reply
        • RinggitPlus

          Hi, Allan

          Banks look at a person's current credit ratio before they grant him or her the next amount of credit limit. Typically, they want to see a person having a good debt to income ratio to be sure that this person can pay the debt when the debt is due. So, the things that matter is how well you manage the current credit limit.

          As such, you may want to make sure that your debts are settled in a timely manner and maintain a healthy credit score.

          Thanks for the question and we hope this help.

          Reply