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How to Get a Low-Interest Rate on a Personal Loan?

Personal loans at low rates of interest are prudent means to face any immediate financial requirements. From funding your child’s marriage to booking a holiday trip abroad with your spouse or family members, personal loan proceeds can help in all of it. However, availing a loan at a competitive rate of interest is crucial. Doing so would assist you to make repayments easily. So, figuring out the best interest rate offered is important.

How can you avail the lowest personal loan interest rate?

Personal loan interest rates all banks that offers are not the same and differ based on your credit score, profile, income, and various other factors. For instance, SBI personal loan interest rate range between 11 and 14 per cent per annum while HDFC personal loan range anywhere between 10.50 and 24 per cent per annum. Mentioned here are some ways you can avail a lower rate of interest on your loan –

Excellent credit profile and score

A credit score shows credibility based on how you have managed your credit previously. A credit score ranging anywhere between 750 and 900 is considered as good for personal loan approval. The higher your credit score, the better your chances of availing loan approval. Lenders determine the repayment tenure, loan proceeds and rate of interest depending on your score. A higher credit score endows you with an upper hand when it comes to negotiating terms.

Compare the lenders

Searching for an ideal personal loan needs some research. Ensure to compare the personal loan lenders available in the market to figure out the loan with a suitable rate of interest and benefits. This would take time but would ensure you make the correct decision. Check out your eligibility and then apply for the loan through the online medium. You can avail an instant approval as well as disbursal of loan proceeds to your account within 24 hours in the case of a pre-approved loan.

Also Check: Personal Loan Interest Rates All Banks

Check out for seasonal deals and offers

Lenders usually notify customers regarding special deals through email and SMS. You must ensure to keep a close watch on the offers to opt for the best loan deal. Such offers permit you to avail limited period discount as well on the rate of interest. Such discounts are generally available when you place an application through online mode during festive times.

Make use of professional credentials 

In this case, you draw a high income and work at a reputed private or public company. This makes you come across as a stable candidate for the lenders. So, ensure you use this to your benefit to negotiate for a lower interest rate. Your company’s reputation can assist you avail a lower interest rate as the lender have the assurance that you have all the financial capabilities to conduct timely repayments.

What are the important benefits and features of personal loan options?

Low rate of interest 

The interest rate of a personal loan as compared to a credit card or loan against credit card repayments is considerably lower. It is particularly true in the scenario of bigger loan proceeds.

Can be used for any purpose

Proceeds you get through this loan can be utilised for various purposes. May it be for financing a trip abroad, buying a gadget or repaying your pal, you can consider opting for an online or offline personal loan to meet any of your needs except used for any speculative purpose.

Consolidated debt

One of the crucial reasons for using a personal loan is for consolidating all your existing debts. It is wiser to repay smaller high rates of interest debts like credit cards or student loans by opting for lower-interest credit.

Ameliorate credit profile and score

This is particularly true in the case you have alike kinds of prevailing credit. Opting for a personal loan can be considered useful for ameliorating your credit score. Perhaps, ensure your score can be improved only if you repay your personal loan dues in full and on time.

Form an exigency backup

You may find yourself living as per your pay cheque without saving much for your future instability. In such cases, rather than waiting for any exigency to hit you, it is best to avail a loan to form an exigency fund.

What are the important eligibility parameters for availing a personal loan?

Mentioned here are some of the important eligibility parameters that you must be well-versed in before you place an application for a personal loan. These eligibility parameters include –

  • Salaried individuals employed in private, government, or MNCs and self-employed professionals like CA, doctors, or architects. These individuals have higher chances to secure a personal loan owing to their stable flow of income.
  • Eligibility age ranges anywhere between 21 and 60 years.
  • Income for the salaried must be Rs 25,000 every month while professionals must have an income of Rs 5 lakh.
  • Work experience of the salaried must be three years and above
  • Minimal credit score requirement is 750

Frequently asked questions – 

What’s the repayment tenure for availing a personal loan?

Most financial institutions and banks allow you as a borrower to select a loan repayment tenure of anywhere from one and five years depending on your convenience as a borrower.

How can you lower your personal loan EMI payable?

You can lower your personal loan EMI by ameliorating or maintaining a score of 750 and above. In the case you hold a strong relationship with the bank, then you can negotiate with the financial institution to provide you with a better rate of interest or discount on rates.

Is pre-payment permitted in the case of a personal loan?

Specific lenders might permit you to prepay the proceeds depending on their terms. You would probably be charged a fee on personal loan prepayment. Thus, in the case you intend to make loan prepayment during loan repayment tenure, then ensure you check out with the lender.

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