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Personal loans can be used for just about anything. Read on to see how you can score a lower interest rate on one. 

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Some types of loans have a very specific use — for example, you can only use a mortgage loan to purchase a home. Personal loans are different, though, as you can use the proceeds from one to fund just about anything, be it a new small business or a kitchen remodel.

Personal loans are often easy to apply for, and if you get approved, you likely only need to wait a few days to receive your funds. But easy doesn’t necessarily translate to inexpensive. Here are four moves to make if you’re considering a personal loan — they can help you pay less in interest, saving you money overall.

1. Check your credit before a lender does

Most personal loans are unsecured, which means they aren’t tied to a piece of collateral. This means that having a solid credit score is even more crucial. And if you know your score, you can even look for lenders who are able to work with your specific credit profile, be it excellent, good, fair, or poor.

You can likely access your credit score through your bank’s website, or via one of your credit card issuers (many have a credit score tool that will give you an updated number every month). It’s also a good idea to get a copy of your credit report (free every week for the rest of the year), so you can dig deeper into what that three-digit number means. If you see delinquent accounts from many years ago that should have fallen off your credit report by now, or even errors (such as accounts that don’t belong to you at all), you can ask the credit bureaus to remove them, which will boost your score.

2. Improve your credit score, if you have time

If you have some time, you can work to increase your credit score before you take out a loan. For example, even just making payments to your credit card companies or mortgage lender (or other creditors) on time every month will improve your score, if you’ve struggled with late payments in the past. Your payment history makes up a whopping 35% of your FICO® Score, the biggest piece (which makes sense; creditors want to see that you can repay borrowed money on time and in full).

Another good move ahead of seeking a personal loan is to pay off some of your existing debt if possible. This will lower your credit utilization ratio, and also have a positive impact on your credit score.

3. Consider a cosigner — or a secured loan

If time is short, and you’re not able to do much to boost your credit score ahead of applying for a loan, you still have options (including applying with a lender who specializes in loans for bad credit). If you have a trusted friend or family member who has good credit and is willing to be a cosigner with you on the loan, you’ll likely qualify for a lower interest rate.

This is a very nice thing for someone to do for you, and you shouldn’t take it lightly — only apply for a loan with a cosigner if you are absolutely sure you can make the loan payments on time and in full. Otherwise, your cosigner will have to make the payments themselves or risk damage to their credit score.

Another option for those with lower credit scores is a secured personal loan. This is a type of loan where you put up collateral (such as the contents of your savings account, your business proceeds, or your car) to secure the loan. If you stop making payments, the lender has a way to recoup its losses. A secured loan may come with a lower interest rate as a result, as they are less risky for the lender.

4. Shop around — and avoid predatory lenders

The easiest way to save on your next personal loan is to shop around. Don’t go with the first lender you explore — search for others and collect a range of options to find the loan that will best work for you, both in terms of interest rate as well as loan payoff timeline and any additional fees. This likely won’t take as long as you might fear; online lenders in particular can typically tell you in just a few minutes whether you’ll be approved and what interest rate you can expect to pay.

Just be sure to steer clear of predatory lenders at all costs. Keep your eyes open in the process of finding a lender, and be sure to read all documents regarding your loan. Ask questions, and if the lender seems reluctant to answer them, do not sign on that dotted line. Find a new loan offered by a lender you can trust. And don’t consider borrowing from a payday lender, under any circumstances.

A personal loan can be a great way to borrow money for any purpose. Just be sure to shop around, boost your credit score if possible, and avoid predatory lenders to save money on your next loan.

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