How To Get The Best Personal Loan Interest Rate
Low interest rate personal loans are the best way to tackle your urgent financial needs. Read the ways to get best personal loan interest rate for easy repayments!
When applying for a personal loan, the interest rate plays a crucial role to determine whether the loan suits your financial needs and capabilities. Various factors affect the interest rate charged by the financial institution. A low-interest rate makes the loan more attractive by making repayments easier.
At the same time, it is important to find which bank is best for a personal loan. Do note that a loan with the best interest rate might not be the best loan for you. There are additional terms like EMI, processing fees, application process etc. that you must consider while choosing a personal loan for yourself. When aiming for a lower interest rate, here are a few things to keep in mind:
1. Get A Good Credit Score
A good credit score is a testament to prudent financial management. While assessing your application for a personal loan, the financier will assess your track record of repayment habits and capability. Borrowers who have paid their EMIs and credit card bills in the past on time are likely to be charged a lower interest. By paying your credit card bills, and proving stable and sustained income, you can convince the financier that you are a trustworthy and low-risk borrower. A score of 700-750 or higher is desirable.
2. Comparing Lenders
While you are applying for personal loans, different financial institutions offer different interest rates. This depends on how they assess your application and their risk appetite. As a borrower, you should research which bank is best for a personal loan. You should also look at other terms of the lender and notice whether a lower interest rate means hidden charges or a strenuous application process. IIFL Finance offers attractive personal loan rates up to 5 lakhs with a quick 3-step, hassle-free process.
3. Look Out For Seasonal Offers
At times, lenders may offer special interest rates, especially during festivals. You can opt-in to be notified of such offers through SMS or email. These offers will make the personal loan more affordable if you time it right. You may also ask for any additional discount that lenders may be providing at the time of your application.
4. Take Advantage Of Your Professional Credentials
Being a highly paid employee with a reputed private or public company with a stable income throughout the years builds the confidence of the lender. This makes you a stable candidate and the lender can trust your repayment capability. While negotiating terms, bring this to the lender’s attention and use it to your advantage to push for a lower interest rate.
5. Making Changes To The Tenure
Generally, the lower the tenure, the lower your interest rate. This is because a shorter tenure makes the loan less risky for the lender. However, for the borrower, this means that the EMI will be higher. Essentially, you will pay more money monthly but can bring down your interest rate. Thus, the total repayment amount will be lesser. Therefore, if you have the capacity to pay a higher EMI based on your monthly, you must reduce the tenure of the loan repayment.
Frequently Asked Questions
Q.1 Can A Loan Be Prepaid Before The End Of Its Tenure?
Ans. IIFL Finance allows you to prepay your loan post 6 months of loan disbursal. We do not charge any prepayment fees for the same.
Q.2 Are There Any Additional Costs Involved In Taking A Personal Loan?
Ans. There may be some additional costs included like a processing fee of up to 2% and late payment charges if you default on your EMI payments.
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