Interest rates rise and fall. They change by the year, and a lot of other factors determine your rates, too. For instance, if you got an equipment financing loan, your interest rates would be lower than if you were to get a term loan. With so many factors in play, it can be tough to figure out whether you’re getting a good rate. That said, if you start with the factors below, you’ll get a strong idea.
Search the Averages
When you search for the average interest rate, make sure that you search the specifics. Don’t just look for generic averages. Find the average interest rate for your type of loan in the current year. From there, you can compare your potential rates with those averages.
Consider Your Source
Next, think about your potential loan sources. Big banks and larger firms will have higher interest rate averages than smaller community banks and credit unions. Smaller organizations are more likely to see people over dollar signs. They’ll recognize why your business is important to you and to the community. Virtually all community banks will have better interest rates than the corporate giants, so keep that in mind when searching for loan opportunities.
Think About Your Credit Score
Now, consider your credit score. The lower your credit score, the higher your interest rate will be. The question is whether you’re getting a good rate for your credit score. For example, you may be getting a high interest rate compared to a lot of the population, but you could still be getting a great rate compared to other people with your same credit score.
Compare Before You Commit
Before you commit to a business loan, compare your options. Many loan organizations have a free quote tool that you can use to calculate your interest rate. You can also search their websites and even call a few places. This way, you won’t have to worry that you’re missing out on a better rate.
Check With BundleFi
The best way to make sure that you’re getting a good interest rate, of course, is to find your bank through BundleFi. BundleFi connects small business owners with community banks and credit unions. We help these business owners find the loans that will work for them. Contact BundleFi when you’re ready to find your best business loan options.