There is no doubt that a personal loan is one of the most trusted and easily available financing options for an emergency. You can avail of a personal loan and use the funds for any reason, without any restrictions. It is not a secured loan, which is why personal loan interest rates are a bit higher than other loan interest rates.
With technological advancements, it has become simpler to get a quick personal loan. Yet, availing of a low-interest personal loan is still a tricky task. Lenders think about many parameters before deciding to charge a lower interest rate on a personal loan. Mentioned below are some of the techniques to avail lowest interest rates on personal loans.
How to Get the Lowest Interest Rates on Personal Loan?
· Use your Credit Score
All banks and NBFCs evaluate personal loan applications and decide the rate of interest depending on your credit score. An excellent credit score offers you a better chance of getting lower interest rates on personal loans. Your credit score can be maintained by making loan repayments on time, in full, and maintaining the same streak to keep a clean and healthy credit history. Banks prefer loan seekers with a credit score of over 700 as they are deemed to be credit-worthy.
· Avail Discounts & Offers
While researching for the best personal loan lenders that offer a competitive interest in the market, make sure you check out the ones that offer festive season special deals or best rates for corporate employees, and more. This is the best way you can avail lowest interest rates on a personal loan and seek some concession on processing fees.
· Maintain an Excellent Repayment Track Record
A long-term track record is also as significant in getting a reduced interest rate for personal loans as a credit score. If your record for a previous or existing loan repayment is excellent, you will be in an improved position for negotiating on interest rates. Moreover, if you availed of your previous personal loan with a certain lender, going again to the same lender helps you immensely with lower interest rates because of your relationship with them.
· Build a Relationship
At times you can get a low-interest rate on personal instant loan approval based on your relationship with the lender. If you are an existing and old customer, the lender provides you with better interest rates to hold on to you as their customer. Another benefit of taking a personal loan from a familiar lender is that the lender is already aware of your responsible credit behavior, which ensures a speedy loan approval and disbursal. Eligible loan applicants have the freedom to avail themselves of a striking interest rate than what is offered to other clients.
· Know Interest Calculation Method
Do not select a personal loan scheme based on its low-interest rates. You must know the complete loan calculation while getting a personal loan. Even though a few banks or lenders might offer personal loans with reduced interest rates, the computation sometimes does not comprise the slow repayment of principal and interest amount.
You may sometimes get a flat rate that can cost you more than a retreating interest. A diminishing loan rate indicates payment of interest towards the due balance only. Still, a flat rate necessitates you to pay interest towards the loan total throughout the loan tenure.
· Compare all offers
With the option to apply and get a loan online, it has become simpler to inquire about different loan offers. Now you can visit the websites of the banks and financial institutions and get total information about their offers. This can assist you in making a relative analysis and getting a lower interest rate. You can as well take the help of an EMI calculator to verify your eligibility for the offers before you make an application for the personal loan approval.
· Employer’s credibility:
If you are working for a reputed firm or an organization, then it helps if you are searching to avail of a personal loan for yourself. The lender knows that a well-known organization is more at ease offering a stable job. In case you are a part of a similar organization, the possibilities are you are safe and have a steady income which compels the lender to feel positive about offering you a loan.
Getting a personal loan at a lower interest rate is essential as getting a good scheme from a good bank. Being aware of your credit behavior and managing your finances in a well-planned way can give you that much-needed support on time.