A personal loan works best in times of financial emergencies. You can use this to fund medical urgencies, pay your child’s college admission fees, meet your business’ financial shortages, and fulfil a range of personal and professional needs. Since it is collateral-free, a personal loan interest rates can go up to 20.0%. This varies across lenders and will depend on factors such as your income, credit score and history, debts, and city of residence.
In order to become eligible for a personal loan on affordable interest rate, here’s what you can do.
Compare Personal Loan Rates Offered By Multiple Lenders
When scouting for a personal loan, take some time out for research. Compare personal loan interest rates offered by various lenders to find the best one. This way, you can save a considerable sum as interest outflow. For instance, choosing lenders like Bajaj Finserv will help you get a substantial personal loan of up to Rs.25 lakh on simple eligibility terms and a nominal interest rate. You can conveniently repay this via a flexible tenor ranging across 12 to 60 months.
What’s more, you can save more by accessing personal loan on flexi loan terms. This facility allows you to withdraw from your sanction multiple times, in parts. Here interest is charged only on the amount you use and not your entire sanction. You can also make part-prepayments on your loan anytime you have access to extra cash without paying a fee. Moreover, you can also choose to repay the loan as interest-only EMIs and then pay the principal at the end of the tenor. This way you will be able to save up to 45% on your EMI.
Maintain or Improve Your Credit Score
A good credit score of 750 or more is likely to get you a nominal interest personal loan sanction. This is because a high score reflects positively on your financial standing and creditworthiness. It shows that you are responsible and can manage credit well, without any default. In contrast, a bad score will lead to rejection of your personal loan application or will require you to bear high personal loan interest rates. So, Improve your credit score or work on improving it to improve your chances of getting an affordable sanction.
Ensure You Have Stable Income
Having a regular income is important when you are applying for a personal loan. Lenders verify your financial details carefully to understand how well you will be able to handle repayments. Financial stability will fetch you a substantial sanction on affordable interest rates and at the same time, keep the debt-to-income ratio under check. Identify the minimum income and number of years in employment or business vintage prescribed by your lender. Keep this in mind while applying to get the lowest personal loan interest rate.
Hunt For Seasonal Personal Loan Offers
From time to time, lenders come up with special loan offers. You are likely to get intimated about these deals via SMS and email. So, keep a tab on such loan offers to gain from lower interest rates on your personal loan.
Consider the aforementioned tips to bag a low interest personal loan without much ado. To get started with an advantage, check your pre-approved offer, by simply feeding in your basic information such as name and contact details. This will help you access a customised deal and enjoy quick financing with instant approval.
Additional Read: 5 Reliable Ways to Reduce the EMI on Your Personal Loan