Availing a personal loan is an affordable solution to manage your unplanned expenses and emergencies. Whether it is a medical emergency or a planned home renovation a personal loan can help you with any of these. The loan comes online and hence can be availed by anyone from the comfort of their home and office.
But even then many people hesitate to go for a personal loan, the reason is the high-interest rate and complex terms. But this a complete myth, personal is not costly if you fulfil the eligibility criteria and have good CIBIL. The terms and conditions involved for the loan are quite simple which makes your stress free for the entire tenure.
well, the factors which define your eligibility criteria are- Your age, type of employment, your employer, your monthly income, your credit score, and your debt-to-income ratio, and your liabilities. However, the eligibility criteria vary from bank to bank and if you meet them your loan application will be approved without any hassle. Meeting the eligibility criteria of your lender also helps you to get approved for the loan at the lowest and affordable rates.
So, if you are in any financial cash crunch and need money, then availing of a low-interest personal loan can be one of the best solutions.
However, to get a personal loan at lower rates you need to follow certain things, which includes:
Disclose all your income sources
Be it the income coming from a rented flat or a freelancing job, disclosing your second source of income can help you get a personal loan at a lower rate of interest. The idea here is to reduce the risk involved to the lender by showing that you have sufficient income to repay the loan.
Apply with a lender with whom you have a good relationship
Personal loans are offered by a wide range of lenders, ranging from top nationalized lenders to private-sector lenders. And to get the best deal on your personal loan, you need to apply with the one with whom you have a good relationship. The reason is – you may get some benefits that you wouldn’t have with the new lenders. This is because your existing lender, being aware of your income and financial behaviour, maybe more readily convinced that you will repay the personal loan without any default. Hence there are chances that you may get approved for your personal loan at lower rates.
Adding a co-borrower
Adding a co-borrower to your loan application not only adds to your eligibility but can also help you get the best deals and lower rates of interest. So, if your lender allows, do add a co-borrower to your personal loan application to make it a happy experience for you.
But, even if your loan gets approved at a lower rate of interest, it is important to manage it properly so that it can’t be a burden for you in the future.
How to manage your personal loan:
- Borrow as per your requirement.
- Make a budget to plan the repayment.
- Be timely with the payments/EMIs so that you don’t need to pay penalties.
- If allowed, pay more than the EMI.
- Go for part payment and pre-payments whenever you have sufficient funds.
- Keep a track of the remaining loan amount and payments.
Personal loans can prove to be a straightforward and stress-free process once you are aware of the process. Being scared of the rates is not a good thing, as you can also work on it and bring it down to the lowest. However, having disciplined finances, setting a well-thought-out budget are always the keys to happy borrowing.