How to avail of personal loans at low-interest rates?

Availing a personal loan in India has become easy, as one can easily file the loan application in a few clicks. Not only you can apply for a loan online but can also get instant approval and have the sanction disbursed without the need for any physical visits to the lender. However, apart from getting funding quickly, it is also important to know how to get a personal loan at a low-interest rate. This way, you can reduce the cost of borrowing and enjoy a more comfortable repayment experience.

To help you get started, here are 4 ways to get a personal loan at a low-interest rate.

Ensure you have a good credit score

Your credit score is one of the important factors that help lenders to determine your eligibility. It can also help you get a better deal on the interest rate. Most of the lenders prefer applicants who have a credit score of 750 and above that indicates your creditworthiness. As a result, lenders will be open to negotiations, which can lead to favorable terms.

Apply for a loan from a lender you have dealt with before

One of the easier ways to get a personal loan at a lower interest rate is to apply for it with a lender you have maintained a relationship with before. Lenders are more likely to consider negotiations made by the existing customers as they have an idea about your repayment capability. Moreover, lenders also offer their existing customers exclusive deals and better rates as a reward for their patronage.

Maintain employment at a reputed organization

Your employment is also a factor that can help you get a better rate on your personal loan. While evaluating your application, lenders investigate your employment history to determine whether you can maintain a stable income or not to repay your loan. Lenders also verify your employer’s credentials to further ascertain the stability of your primary source of income. Any causes for concern in these checks may make you a risk to lend to and that risk translates into a higher interest rate on the loan.

Take advantage of seasonal deals

During the festive season, banks and NBFCs launch attractive schemes offering personal loans at lower interest rates to lure their customers. Applying for a personal loan during such times is beneficial as this can help you cut down on your loan expenses.

Important points to note

1. It is prudent to read the fine prints carefully of the lender you have chosen. It will help you to know about the service terms that your lender is offering. Also, make sure that you base your decision not only on the interest rate but also on the loan tenure, processing fee, prepayment charges, loan amount, etc.

2. The lender may not give offer you a good deal if you have already applied for too many loans. Also, if your credit score is low, then it can even lead to rejection of your personal loan application or you will get it at a high rate of interest.

Anyone can easily apply for a low-income personal loan if you meet the eligibility criteria of the lender. A mini loan can be a great choice for those who want to meet their immediate financial expenses instantly.