5 Tips To Get A Lower Interest Rate On Personal Loan

By Author: Sujuu
Total Articles: 1
Comment this article

A personal loan has emerged as the most appropriate and perfect credit financing tool to handle any sort of financial requirements. This type of loan doesn’t involve any collateral requirement, has no predetermined final use, involves minimal paperwork, and is disbursed quickly.

So, if you want a lower interest rate personal loan, here’s what you need to consider and follow:
Determine & Check The Technique For Interest Calculation

It is usually recommended to check the technique or methodology used by any specific lender for interest calculation on personal loans. Personal loans can sometimes be provided at a lower and more affordable interest rate.

However, if you choose a longer loan tenure, you’ll pay a higher interest amount in total. Lending institutions offer personal loans at either reduced or flat interest rates. When it comes to flat interest rates, they calculate the interest on the complete loan principal amount for the whole loan duration.

Nevertheless, when it comes to reduced interest rates, the lenders calculate the interest payable only on the remaining or balance ...
... principal amount. Thus, opting for a personal loan offered with a reduced interest rate will be more cost-effective for you.
Dig Some Thorough Research For Your Options

Market research and evaluation will assist you significantly in comparing and analyzing the options from different lenders. It will also help you to identify the best low-interest rate personal loan.

It’s imperative to know that even a slight difference in the interest rate can significantly impact your savings. See if the lending institution offers instant approval and disbursal or has any stress-free, digital logan application solution.

You can check online testimonials, ratings, and reviews on various platforms to identify which bank or financial institution is currently offering the best interest rate for personal loans, in addition to other facilities like quick disbursal.
Try To Keep A Good Credit Score

A credit score above 750 is typically considered a good credit score in India. Maintaining a good credit score can boost their potential to get new credit. Besides, it also assists them in getting the required loan amount along with the desired loan repayment tenure at an affordable interest rate.

Typically, a good credit score helps you to opt for a low-interest rate personal loan on the borrowing. That’s because the higher the credit score, the higher your creditworthiness and the better your repayment ability.
Close Your Existing Loans, If Any

If most of your income is spent on existing loans and EMIs, chances are you won’t get a low-interest rate on a personal loan.

Thus, you should try closing off as many existing loans as possible to reduce your overall liability. Make sure your liabilities are less than 40% of your income by closing down certain loans.
Good Employment History

Besides boosting your personal loan eligibility, a prolonged and stable employment history can help you get a personal loan at a lower interest rate.

Lending institutions mostly ask their applicants to consist of a minimum of two years of employment history, comprising one year of employment record with the current company.

Individuals working in central or state government and private and public organizations are often offered personal loans at reasonable terms and lower interest rates.
Final Words

Although these may seem like simple tips to get started, once followed precisely, they can help you all the way to secure a personal loan at the lowest possible interest rate in the market. So, follow these tips to reduce your EMI burdens with a low-interest rate.