5 Important Factors That Affect Personal Loan Interest Rates

Are you all set to apply for an online personal loan? 

Do you also don’t want the higher personal loan interest rates to affect your monthly outlays? 

If yes, it would be prudent to know some factors that can affect it. 

Go through this post and know more!

1. Cibil score 

If you have a higher cibil score, then you can get a lower interest rate on personal loan. In turn, it can help you pay reduced EMIs. Having a lower credit score means managing higher personal loan interest rates. It means you will need to pay higher EMIs. 

2. Your income 

The higher your income is, the more confident will be your lender to sanction the loan at a lower rate. The lower is your salary; the higher will be the personal loan interest rates. It is because lenders may not be confident if you can repay timely EMIs.  

3. Working for a reputed employer 

If you are working for a known employer, then your lender will offer a personal loan at a lower rate. It is because they will be confident that you will get timely Salaries and pay EMIs on time as well. 

4. Existing customers 

You can enjoy lower personal loan interest rates if you are an existing customer of a lender. The lender, in this case, will be aware of your repayment record. Hence, it may provide you with an affordable rate as it may not want to lose you. 

5. Defaults 

Do you have instances of defaults in your credit report? If yes, then a lender may charge higher personal loan interest rates. It may even reject your loan application. It would be good to have a repayment history of no defaults in the last 12 months. 

You can assess your profile and check out where you sit. It will help you know if you will end up getting higher or lower personal loan interest rates.

You can also know about Personal Loan App