Do you need to borrow some cash? If so, your best option will be a loan to help you get the money you need right away. However, personal loan rates are quite different than other loans. The rate is not set like a mortgage rate is, with there being many factors that can determine how much you will pay to borrow money. Here is what influences interest rates for personal loans.

Credit Score

Credit scores fall with a certain range, with higher credit scores allowing a borrower to receive a better interest rate. Those with a low score, which are generally considered more risky, will receive a higher interest rate. That is why a credit score plays into how much money you will be able to borrow how much you pay for it.

Even a single percentage point difference in a loan can be what helps you save hundreds or thousands of dollars over the court of a loan.

If you have a low credit score, you'll need to take some steps to improve it. Start by eliminating your debts on credit cards, and get into the habit of paying those bills in full and on time each month. In addition, show some restraint when it comes to using your credit card. A person with a $1,000 credit limit and always has a card maxed out is demonstrating that they cannot responsibly use their own credit. Limit your total purchases on the card each month to something closer to $250, which will show that you won't go wild when given money to borrow.

Terms

The time you are requesting to pay back the loan will also factor into your rates. If you are looking to pay off the loan over many years, you will not only receive a higher rate, but you'll pay more in interest over each year of the loan.

Try asking for a loan that is shorter in length. If you know that you can still pay it back on time, you'll save money in both the rate and interest payment.

You can also get an adjustable rate mortgage if you are not sure you can pay the loan back in time. These loans start with a fixed interest rate that is low, but then increases after a set period of time. If you can repay the loan during the initial fixed rate period, you'll save on interest. Contact a lender, like US Community Credit Union, for more help.