Personal loans have always been one of the most preferred sources of borrowing in India. With multiple lenders offering personal loans in the market, the interest rates of these credits have also transformed into competitive ones. Interest rates levied on these loans are generally 13% onwards. Low-interest personal loans have always been in demand.
Although it is the lenders who decide and levy the interest rate on loans, the eligibility of a borrower also play a crucial role in determining the rate as well. Applicants can follow some simple steps and reduce the cost of borrowing substantially. This becomes way more important for unsecured personal loans; you can ensure a smooth and affordable repayment by getting a low personal loan interest rate.
4 important tips to lower your personal loan interest rate
There are multiple factors which affect personal loan interest rates. But these factors should not deprive an individual of availing a personal loan. You can keep the following four points in mind to lower the interest charges:
1. Maintain a good credit score
The most basic approach to get lower personal loan interest rates is to improve personal loan eligibility. Credit score plays a vital role in this aspect. A borrower with a poor credit score might have to pay higher interest charges on a personal loan.
Financial experts recommend maintaining a credit score of at least 750 or higher to avail the best terms on a personal loan. You can negotiate with your lender if you have a high credit score and a good repayment history.
2. Borrow from an existing lender
Borrowing from a lender who you already have availed services from holds better chances to facilitate a low interest personal loan. This is when a lender is already aware of your credibility and financial responsibility. Dealing with known lenders also makes interest-related negotiations easier. Some lenders also offer exclusive benefits to existing and old customers.
For example, Bajaj Finserv provides pre-approved offers to their existing customers. These offers simplify the application process and help save time. You can check your pre-approved offer online by providing only some basic details (name and mobile number).
3. Maintain a steady employment history
Your consistency of income and employment stability also plays a crucial role determining the personal loan interest rates. Lenders take these two points into consideration to assess your capability of repaying a loan without defaulting. If you are a salaried individual, the lender will verify your employee credentials. If you are a self-employed individual, you will have to provide business proof and convince the lender of its returns and stability.
4. Look for customised deals.
Lenders such as Bajaj Finserv now offer personalised pre-approved personal loan offers to customers, depending upon their profession, income, financial requirements, repayment capability, and so on. You can opt for the best offers to enjoy lower interest rates on a personal loan.
Various online tools have been launched to assist you regarding loan-related issues. A personal loan eligibility calculator is one of them. This calculator will tell you what amount you are eligible to borrow, based on only four inputs. These inputs are your residing city, date of birth, monthly income, and monthly expenses.
The verification process of personal loans has also been streamlined to initiate faster disbursals. By the time you reach the verification stage, you should have already negotiated and finalised an interest rate which you can conveniently afford.
