How do I get the Lowest APR?

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  • Written By: B. Miller
  • Edited By: Andrew Jones
  • Last Modified Date: 16 February 2020
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There are a number of ways to get the lowest APR, which stands for annual percentage rate. Getting a low APR can help save you a great deal of money over the life of a loan, whether it is a home loan like a mortgage or home equity loan, a vehicle loan, or a personal or student loan. The first way to get the lowest APR is to shop around for loan rates the same way you shop around for anything else; get information from different banks, and see which banks are offering the best rates. Other ways to get a low APR include making a larger down payment, or getting a cosigner for the loan.

When shopping around for the lowest APR, you will want to consider a few factors. First, if you are shopping around and getting prequalified for a number of different loans, try to do this all within a two-week period. That way, it will only show up as one credit inquiry on your credit report, rather than a number of different credit inquiries. Also consider whether the loan has a fixed or variable rate; even though variable rate loans may have a lower APR up front, they could eventually go up much higher than you want, leading to a huge monthly payment.


Shopping around is one good way to get the lowest APR, but it is not always an option. Another one of the best ways to get the lowest APR is to put a greater down payment on a home loan or auto loan. Banks are more willing to work with people who can afford to put down a larger amount, because it makes them less of a credit risk. On a mortgage, you also have the option to pay points on the mortgage up front, which reduces the interest paid over time.

Personal or student loans often make it tough to get the lowest APR, because they are unsecured loans with no collateral. Federal student loans will almost always have the lowest APR, so exhaust those opportunities first. Then, one of the best ways to get a low APR on a student or personal loan is to get a cosigner who has good credit to sign on the loan with you. Student loan companies, in particular, often encourage borrowers to have parents cosign the loan, because students may not have a good credit history yet.



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