Use the following tips to get the most favourable personal loan interest rate
A personal loan is an unsecured form of borrowing that does not require you to submit collateral or pledge any asset as security. These loans offer fixed interest rates and flexible repayment terms, making them a safe bet for borrowers. On the other hand, the lender’s interest rate impacts the affordability of a personal loan.
Personal loans with low interest rates are a cost-effective way to satisfy your immediate financial demands. A personal loan can cover all your significant needs, from paying for your child’s education to preparing a gorgeous wedding. However, it is critical to obtain an affordable personal loan interest rate with flexible repayment terms.
Here are a few tips on obtaining a competitive personal loan interest rate:
- Keep your credit score high
Based on your credit score, lenders can simply analyse your creditworthiness. If you have a good credit score, lenders may offer you a lower personal loan interest rate because they regard you as a low-risk borrower. It is advised that you have a credit score of 685 or above. For a competitive personal loan, the most essential factor is the CIBIL Score. Maintaining a consistent payback record, a moderate debt-to-income ratio and a fair level of credit usage will help you in reaching this goal.
- Display all sources of income
When applying for a loan, you must share details of all your income sources, including investment, dividends, and rental income. This reveals to the lender your ability to repay the loan and enhances creditworthiness. All of these variables allow you to receive a competitive personal loan interest rate.
- Compare the offers of several lenders
It is important to evaluate the offers of different lenders because their terms and conditions may differ. Using a personal loan interest calculator makes comparing offers easier. This personal loan calculator estimates EMIs by taking into account personal loan rates, loan amount, and loan tenure. This tool can be used as many times as you need to uncover loan possibilities that fit your repayment capacity.
- Maintain professional stability
The best method for showing your financial stability is to demonstrate stable employment with a reputable company. Moreover, being employed for at least one year with the current employer reassures lenders of your ability to make timely payments. These factors collectively reduce your risk profile, making your case stronger for competitive interest rates on a personal loan. On the other hand, frequently changing jobs could make your application weaker as it might suggest less job security, which might have an impact on the loan terms provided by lenders.
- Meet the lender’s eligibility requirements
It is vital to choose a lender with simple eligibility criteria for a personal loan. If you have to meet a lot of complicated conditions, it may be more difficult to acquire a loan, and you may have to compromise on the amount you borrow or the interest rate you pay. However, simple eligibility conditions and a quick verification and approval process can help to speed up the release of your funds. Compare the terms of numerous lenders before applying. This also prevents you from wasting time by applying for loans for which you do not qualify.
Lenders like Bajaj Finance Limited provide personal loans of up to Rs. 40 lakh with funds often disbursed within 24 hours* of loan approval. You can also use the interest calculator available on the Bajaj Finserv website. Use the tips provided above to secure a competitive personal loan interest rate.