Sometimes it's difficult to know just where to begin, but everyone wants the best personal loan rate. The key to that question is where to begin looking and how to find the rate with which you feel comfortable. It may seem to be a tedious chore, but there are easy ways to accomplish the task.

Beginning the search

For most people, the first place they tend to look for the best personal loan rate is with the bank where they transact their business. This may or may not be the best choice, but it is certainly a place to begin.

Banks charge interest rates based on the strength of the borrower's credit, so if you have strong credit, it's quite possible your own bank will offer you their best rate.

Even if you think your bank has given you the best possible rate, make it a point to do some more research before you make a final decision. You can either make some telephone calls locally or do a search on the Internet, but don't be content with just one rate quote.

Making a decision

As difficult as it may seem, making a decision on the personal loan rate is in your best financial interest. After all, an interest rate difference of even 1% can make a difference over the course of the loan and even in the monthly payments. In addition, if you can find a lender willing to give you a lower rate with a longer repayment term, you save money on the monthly payments.

Certainly, you will pay more over the course of the loan if you choose to extend it, but if you pay it off early because you can pay extra each month, you will actually save money.

Applying for the loan

After you have found the best personal loan rate, you need to arrange with the lender to fill out the application or go to the website if you're applying online. Before you even begin filling out the application, either in person or online, be certain that you have everything that is needed.

In most cases, the lender wants proof of identity and address (driver's license, state I.D., passport, or military I.D.) and proof of income. Even if you are applying online, you may need to fax these items to the lender before they will release your loan proceeds.

Obtaining the proceeds

Once the paperwork has been completed, the lender will issue the loan proceeds. In the case of an online application, this will be done either through the mail or through a wire transfer into your bank account.

Some online lenders may require a signature on the contract, but others may accept an electronic signature, but all local lenders will require your presence to complete the loan application process. Read the contract carefully and make sure you understand everything before you sign it.

The most important thing is to be certain that it agrees with what you have already been quoted. Questions need to be raised before you sign the contract because once the transaction has been completed, you are bound to its terms even if they differ from what you were quoted.