Getting a loan sometime can be a very straightforward thing. The main reason why financial institutions give you low apr loans is because they want to make money from you. Some people mistakenly think that bank manager that approves their loan application is doing them favours. This is far from the truth. The bank manager is simply making money for his employer ie the bank. Banks use credit agency to assess your suitability for loan. If you have good credit history, they offer you as in general, low apr loan. However, if your credit history is not  good enough. Getting a low apr loan could prove very difficult. The bank may want to offer you a high apr loan.

Banks make money on loans by assessing their risk on each individual loan application. They offer you high interest if their risk is higher, people with bad credit history represent high risk to the banks, hence high apr loans. Their assessment is based on their perception of your likelihood of defaulting or paying back the loan. As a business or an individual looking for loan, your objective is to protect yourself by shopping around. Don’t ever accept your first loan offer no matter how good it sounds. Shop around, use the power of the internet to look around for the best loan deal. If you eventually decide on a particular loan offer, you can still haggle, by offering to accept the loan on lower apr rate. You may be surprised that the bank manager say yes to you.  Hence, when applying for loan don’t sound too desperate, be calm and ready to negotiate the best loan deal for yourself.

Banks are not like me and you, they do not understand that people situation do change, or rather that “no condition is permanent”. Hence if your credit history is good and you just lost your job, banks will still give you low apr loans. If you have been out of work for a while and you are now in good job, banks still look at your period of unemployment and offer you high apr loans especially if you had some missed payments during the period you were out of work. The key is look after your interest while looking for low cost loans.