Whether it is for something that you have planned carefully, such as a wedding, holiday or home revamp, or something that has caught you unawares, such as a medical emergency; a Personal Loan is a resource you can count on. The most important factor to consider while availing a Personal Loan is getting a low interest rate. The interest rate for Personal Loan differs from one lender to another and it depends on factors like your employment status, CIBIL score, income, and existing EMIs as well as external factors such as the lender’s own criteria, RBI policies etc.
There are various ways to avail a better interest rate for your Personal Loan.
Maintain a Good Credit Score
Having a strong credit score improves your chances of getting a Instant Personal Loan on a nominal rate of interest, as the lender believes you are a responsible borrower and that you will repay your loan on time without fail. Your CIBIL score is a sum total of your credit history, debts, and your credit performances. A high score of 750 and above is considered as ideal and will help you crack a good deal with a lender of your choice. Additionally, equipped with an efficient credit score, you can negotiate better usage and loan terms with the lender. You can efficiently maintain a good credit score by being disciplined with your debt repayments and credit card usage.
Choose a Lender with Low Related Cost and Fees
Getting a low interest rate is not the only cost to be considered. You should also look at other costs such as processing fees, late fees, foreclosure charges and more. These fees and charges increase your borrowing cost, making a Personal Loan expensive for you even when the interest is lower than the market offerings. Hence, you should always consider these charges along with the interest rate and then choose the lender who offers a quick Personal Loan on the whole.
Compare Lenders and Consider Borrowing from an NBFC
Before applying for a loan, conduct thorough research about different lenders in the market. To make an informed decision, you should know everything about them, fees, interest rates and the maximum loan amount on which they grant a sanction. Consider NBFCs to avail a Personal Loan as they offer loans at low interest rates and are more flexible with the loan terms.
Choose trusted lenders like Bajaj Finserv to avail collateral-free Personal Loans on affordable interest. Here you can choose a comfortable tenor of 12 to 60 months to repay the loan with ease. Further, you can unlock added benefits and convenience on your loan by selecting the Flexi Loan facility. This facility allows you to withdraw money from your sanctioned amount as per your needs through repeated withdrawals at no extra charge. Also, you are charged interest on only the amount you use and not the entire amount. You can choose to pay interest-only EMIs and minimise your EMI obligations. This way you will be able to extend the affordability of your sanction to the overall loan obligation efficiently.
Have a Low Credit Utilization Ratio and Maintain Job Stability
Your financial standing gets reflected via your income to expense ratio. Adding your credit obligations to this will allow you a chance to calculate your credit utilisation ratio. In case 50% or above of your salary or income goes towards credit utilisation then the lender will view this as an imbalance. This reduces your repaying capacity and will not give you a chance to avail a Personal Loan. Your employment and job stability is also taken into account.
Instead of worrying about these factors, you can check them in advance using the Personal Loan eligibility calculator in a few clicks. This will give you a clear idea of your eligibility with the lender in question and will also tell you the loan amount for which you are eligible. Alongside this, calculate your loan EMIs in advance using the Personal Loan EMI calculator.
Negotiate with your Lender
If you have a regular income, financial stability and a good credit score, you can negotiate with your lender to lower the interest rate on your loan. Lenders view your credibility in a positive light and thereby are more eager to offer you a Personal Loan on easy and convenient loan terms.
Generally, your income and credit score are the two most important factors that lenders consider, to offer you a best Personal Loan.