A personal loan is one of the financial products you can take advantage of for yourself. It can meet various financial needs such as higher education loans, loans for abroad study, and many more. Several banks in India offer personal loans, and you can easily apply for one either online or in person. It is essential to compare the best personal loan interest rates from different banks before deciding on a personal loan.
Tips to get the lowest interest rates on Personal Loan
Boost your credit rating
You are creditworthy if you have a high credit score. Banks and financial organizations offer applicants with a high credit score the best personal loan interest rates. As a result, before applying for a personal loan, you should verify your credit score. It is also advisable to check the documents required for personal loans and eligibility for a personal loan. If your credit score is below 750, you should seek strategies to raise it. If your credit score is over 750, you have a better chance of securing a low-interest personal loan.
Don’t miss your repayments
If you fail to make a loan or credit card payment on time, your credit score may suffer. Before settling on personal loan interest rates, lenders consider your credit history. Those who have paid their EMIs and credit card bills on time in the past will most likely be charged a lesser interest rate.
Don’t miss out on special offers
During the festive season, banks and financial institutions frequently offer special interest rates for a limited time. If you apply for a loan when such an offer is active, you might be eligible for the best personal loan interest rates.
Compare Interest Rates
Before applying for a personal loan with a certain bank, you should evaluate the personal loan interest rates offered by several NBFCs and banks. This will enable you to obtain a personal loan with a low-interest rate.
Negotiate with your lender
You can negotiate the best personal loan interest rates if you are a current bank customer or have a good relationship with the loan provider.
Factors affecting personal loan interest rates
When determining the best personal loan interest rates, lenders consider the applicant’s income. Therefore, individuals with a high income may be offered a cheaper interest rate since they pose a more negligible risk to the bank. Those with lesser annual salaries, on the other hand, may have to pay a higher interest rate.
Banks and financial institutions are more likely to offer you lower personal loan interest rates if you work for a reputable organization.
Nature of Employment
Applicants may be offered various interest rates depending on whether they are self-employed or employed.
It is also possible for the applicant’s age to influence the interest rates quoted by the loan provider. Individuals approaching retirement age may be charged a higher rate of interest.