Lowest Rate Personal Loan
If you find that you are falling short on finances, one alternative that you might explore is getting a personal loan. Personal loans continue to be a popular choice for many people, who use them for various purposes, including purchasing consumer goods, taking their families on vacation, and covering the costs of holiday celebrations. You should keep in mind that these types of personal loans come at a higher interest rate because they are unsecured and have no collateral backing. Several factors contribute to the decision to take out a personal loan, but the most important thing is the rate of interest at which the loan is borrowed. One can calculate personal loan interest rate by using an interest rate calculator.
Personal loans are based on the rate at which the lender decides to approve them. In India, it is linked to the lending rate set by the Reserve Bank of India. The lending rate will determine the amount which is charged for a loan. It is important to remember that the more the interest rate increases, the higher the loan cost will be, meaning that the payment at the end of each month will be higher. Average interest rates on personal loans in India are usually around 9.5% per annum.
Comparing Personal Loan Interest Rates
The amount of a loan you may be eligible to receive will depend upon several factors, such as your age, job type, credit rating, and loan tenure. Therefore, before applying to any lender, you should ensure eligibility. The benefit of knowing your eligibility terms in a soft inquiry is that you can compare them across several lenders before choosing the best personal loan that suits your individual needs. Nowadays, many people calculate interest rates using an interest calculator, which gives you a close idea of the loan repayment amounts.
Personal loan interest rates are compared based on the followings factors
Annual Percentage Rate
The APR is a measure of the cost of borrowing the money, which includes any fees associated with the application process. An increase in the lending company’s annual percentage rate also increases the loan’s cost.
Terms of the loan
A personal loan becomes more expensive as the loan tenure increases because the interest outflow of the loan increases as well. Quite simply, the shorter the loan period, the lower the interest rate.
Discounts and Schemes
A lending company may offer schemes and discounts to its loyal customers. Thus, you may be able to lower your loan interest rate by taking out a personal loan from a lender with whom you already have accounts.
Monthly Installments
The monthly EMI amount must fit comfortably into your budget. You may face financial difficulties if the monthly EMI amount is too high. Conversely, a very low EMI compared to your ability to settle the balance will result from an unnecessarily long terms loan, leading to a very high-interest rate.
Charges and Fees
A personal loan is not only subject to processing fees, but it may also be subject to periodic charges. Ensure you know the amount to be paid for late fees, prepayments, and foreclosure.
How to Get a Low-Interest Personal Loan
The following are some of the most important factors you need to know about getting a lowest rate personal loan.
Keep a High Credit Score
Lowest rate personal loans are approved for the applicants if they have a high credit score. When your credit score is over 750, you can get a personal loan at a low-interest rate.
Don’t Forget To Make Payments on time
Make sure you do not fail to repay existing credit card bills or EMIs on time. That negatively impacts your credit score and lowers your chances of getting the lowest rate personal loan.
Comparing Interest Rate –
Comparing the personal loan interest rates charged by different lenders is best before submitting a loan application to one particular lender. When you compare your options carefully, you can get a personal loan at an affordable interest rate.
Negotiate With the Existing Lender
Customers with a good credit rating and an established relationship with the company can negotiate for the best interest rate as long as they have a good credit history.
Look Out For Special Offers and Schemes
A limited-time offer allows banks to offer the lowest rate personal loan, especially during the holiday season. Also, special schemes for women applicants and salaried individuals can make obtaining a personal loan at a low-interest rate easier.
Read Also: What Are The Top Factors That Affect Personal Loan Interest Rates?
