The interest rates charged on personal loans are generally higher than those of other loans like home loans, business loan or car loans. This is due to the unsecured & multipurpose nature of the personal loan. A personal loan has the potential to overcome all your short term financial crunches without risking your ownership on any of your pre-existing property. The need for personal loans has become common worldwide and more people are opting for it seeing its benefits. Therefore, the best you can do when applying for a personal loan is to try and get one at the lowest interest rate.
Well, before sanctioning a personal loan a lender considers several factors such as the loan amount that the borrower has applied for, the applicant’s repayment capacity through their income, bank statement and job profile.
Here are a few ways how you can get a personal loan at a lower interest rate.
Maintain a good repayment history – One should repay their debts on time to keep a clean repayment history. Your existing debts and bills should always be paid before the due date, this not only saves you from paying penalties but also results in a good CIBIL score which improves your future credibility.
However, there are few options available in the market to get a personal loan with low CIBIL, but these loans generally require a co-applicant and are offered at steep interest rates.
Compare lenders – To avail the best competitive personal loan interest rates, an individual should consider all the available options. Different lenders/banks offer different features with the loans they provide, moreover, the interest rate and other charges may also differ. Hence, by comparing the different loan offerings, an individual can not only gather insight on their options but can also avail a loan at the best rate and as per their requirements.
Maintain a stable employment history – When an applicant holds a steady employment history lenders are sure about their repayment as compared to the others. An unstable employment history reflects that an individual has a fluctuating income which can negatively influence their personal loan eligibility. Hence, an individual with a stable source of income may get approved for a personal loan at better rates.
Compare by using an EMI calculator
It might happen that regardless of the bank giving you a lower rate on the loan, you actually wind up paying a higher amount at the end. This is because the strategy for computing the all-out intrigue payable can contrast among moneylenders. So, to be on a safer side you should use a Personal loan EMI calculator. This will help you to understand the calculations and know the breakups of your loan, by using it you will also get to know the total payable amount for your loan. Hence, using an EMI calculator for all the options available and comparing them will definitely help you get the best loan for you.
Credibility from the employer
Employees working in reputed companies, multinational organizations, etc. may be able to get the best deals. This is because a well-reputed organization provides job stability to its employees. Personal loans are unsecured and hence more risk is involved at the lender’s end. Therefore borrowers with a stable income are considered to have a higher repayment capacity and thus become the most favorable one for the lenders.
Keeping in mind the above points, while applying for a loan can definitely get you a loan at the best interest rate. But, before you apply don’t forget to check for personal loan eligibility criteria to ensure approval.