A personal loan is a kind of credit option that you can use for any purpose i.e., you can use the loan proceeds to fund your abroad trip, meet your unpaid obligations or finance your medical exigency. The fact that this option is unsecured in nature is another important benefit. As an outcome, you can avail it without pledging any security or collateral.
In the lending vertical, there are numerous lenders offering personal loan deals whom you can directly approach through their website or visit their branch or indirectly approach through online lending marketplaces. However, before you hit on the personal loan apply button, you must ensure to factor in certain crucial parameters that will assist you to get a loan deal at the lowest personal loan interest rate possible.
Opting for a low personal loan interest rate will gradually allow you to get a lower EMI on the loan. Discussed here are tips on how you can get a personal loan at a lower rate.
- Maintain a high credit score
A credit score is a representation of your credit profile in numerical form that ranges from 300 to 900. A credit score of 750 and above is looked upon as good by lenders. Lenders use your credit score to examine your financial obligations, credit history and your repayment capacity. If you have availed a loan before and timely repaid it, the lender will consider you as a low-risk applicant. This may boost the lender’s confidence in you and as a result, you may get an instant personal loan application approval at a lower personal loan rate.
- Maintain a clean repayment record
As stated above, if you use credit cards and monthly require repaying your existing loans, ensure to pay them on time and in full. This will create a positive impact on your credit score and make you eligible for pre-approved as well as regular personal loan deals. Maintaining a good credit profile also allows you to negotiate with the lenders to fix a suitable personal loan interest rate.
- Compare loan offers and check for seasonal deals
Based on your personal loan eligibility, explore online lending markets to compare several lenders and their offered personal loan rates. Additionally, consider checking with your existing bank too. They may provide a personal loan to you at a comparatively lower rate with suitable terms and conditions.
Note that during festive occasions, a few popular banks often provide enticing seasonal offers on personal loan rates and processing charges, which can considerably reduce your overall loan cost. Thus, before you hit on the personal loan apply option, not just compare amongst lenders but also ensure to check with the lender if they are offering any festive deals or discounts to save on the overall loan cost.
- Use the personal loan EMI calculator
Lenders provide an online calculator on their official website for you to compute your EMI and your overall interest cost. To use the calculator, you just need to input 3 major values namely your required loan proceeds, preferable loan tenure and offered interest rate. Once you input these 3 figures, the EMI and your overall interest constituent on loan will be displayed instantly. You can make changes to the figures of any of the parameters to compute a preferable result. Once you get a preferable loan tenure and rate of interest, you can negotiate with the lender for the same. Taking this step will allow you to not just lower your overall interest constituent but also fix an EMI as per your repayment capacity. Fixing an EMI as per your preference makes you stress-free as you worry less about defaulting on the EMI due to any sudden financial exigency.
Ending note
Opting for a personal loan is an important decision and must be made after thorough examination and consideration. Thus, it is advised to conduct in-depth research to zero in on an appropriate lender. Also, it is a must to keep your credit score and profile on a positive mark to qualify for instant loan approval at lower personal loan interest rates.