Owing to a prolonged economic slump since February 2020 witnessed significant growth in the personal loan segment. Due to the growing demand for work from home devices, individuals inevitably started looking for low-interest personal loans to fulfil these requirements.
Even though the abundance of financial services has made it easier to avail the loan, finding suitable options has been challenging for most individuals. Due to this financing option’s unsecured nature, personal loans come at high-interest rates that can saddle a person with hefty repayment.
Certain aspects like CIBIL score, repayment track record, etc. play vital roles here. Individuals can leverage these factors to secure a loan at a lower interest rate on personal loan to make repayment more manageable.
Following are some useful ways you can grab a better deal on your personal loan interest rate.
Factors that influence personal loan interest rates
Finding the best scheme that suits your financial needs can be relatively challenging, especially during emergencies. Therefore, it is advisable to pay attention to the following factors from the very beginning to get a personal loan instantly.
CIBIL score
Most of the borrowers hardly know how CIBIL score is important for personal lending. Consequently, they do not focus on improving it before a financial crisis arrives. Having a healthy CIBIL score is a part of the eligibility criteria set by all financial institutions. Individuals are required to have a credit score of at least 750 to prove their creditworthiness and get loan approval.
Credit history
In order to get a low-interest personal loan, it is equally important to have a good repayment track record as lending institutions decide interest rates based on that. A decent credit history denotes that the borrower is capable enough to maintain the monthly instalments and repay the loan amount.
Look for offers
Quite often lenders provide tailored offers to help the borrowers get low-interest personal loans during a financial crunch. Several financial institutions and NBFCs like Bajaj Finserv have introduced pre-approved offers to make availing finance more hassle-free. These offers are available on several financial products like personal loans, business loans, etc. You can quickly check your pre-approved offer by submitting your name and contact number to find attractive interest rates.
Compare interest rates
Since numerous financial institutions offer attractive schemes, it is advisable to compare interest rates before opting for a particular lender. Consider visiting the lender’s website and make use of their personal loan EMI calculator to check the loan amount. You can also get an idea of the interest rate you need to service for the preferred tenure.
Professional credentials
Individuals working with reputed companies are considered reliable borrowers since they have a steady job and salary to maintain the EMIs. In such cases, borrowers can negotiate a lower interest rate depending on their personal loan eligibility.
Apart from keeping the factors mentioned above in mind, individuals should also look for the right personal loan lender that can fulfil their specific financial requirements. Having a good relationship with the lender helps in negotiating the rates and getting a low-interest personal loan instantly.
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