Securing lower-interest-rate personal loans is the best way to tackle financial instability and manage your finances without the need to redeem your savings or investments. You can use a personal loan to bankroll your needs like financing your children’s higher education, planning an international trip, or managing a wedding.
While deciding on the interest rate, lenders look into factors like your preferred loan amount, repayment capacity, and the company you are currently working for. Getting attractive personal interest rates is both challenging and essential as it helps you make repayments easily. So, finding a good interest rate on a personal loan is a must. Here are different ways to get a better interest rate on an instant personal loan online.
Different Ways To Get Good Interest Rate on a Personal Loan:
- Maintain a healthy credit score
Lenders factor in your credit score before approving a loan amount and deciding the interest rate. It shows your creditworthiness based on how you have managed credit in the past. It helps lenders understand whether you have defaulted on your loan. A credit score over 750 makes you a good candidate for a personal loan.
Lenders calculate your principal loan amount, interest rate, and repayment tenure eligibility based on your credit score. If you maintain a healthy CIBIL score, it gives you an upper hand to negotiate on the rate of interest with your lender.
- Compare different lenders to make an informed decision
Not every lender offers the same rates and benefits due to market competition. It is imperative to compare several lenders in the loan market to find an instant personal loan online with the best interest rates and features. Although it might consume your time, it will ensure that you make an informed decision.
- Look for offers during festive seasons
Offers like discounts or a reduced interest rate are common during festive seasons in India, and lenders often notify their customers about special offers through SMS, email, and social media pages. You must keep an open eye on these personal loan offers to avail of a good interest rate.
The offers during festive seasons allow you to get a limited-period discount on the interest rate, and they are available online. So, keep visiting the loan lenders’ websites and social media pages.
- Your professional credentials play a crucial role
If you are working for a reputed public or private company and are drawing a high salary, lenders consider you a stable candidate for a personal loan. You can use your professional credential as an advantage to negotiate a lower interest rate. Since the lender is assured that you have the financial means to make repayments, you will likely receive a lower interest rate on an instant personal loan online.
- Maintain a good repayment history
The personal loan interest rates are dependent on the repayment history of borrowers. If you pay your credit card bills, clear off your debts, and pay your EMIs on time, you will likely receive a better deal in interest rate. It is obvious that if your EMI payment history is well maintained, you will get to negotiate with the lender to secure a better deal. If you have defaulted on your loan, you will likely receive a higher interest rate, which leads to further financial complications.
- Pay attention to the lender’s interest calculation method
Sometimes, you may receive a lower interest rate on your loan, but you will eventually pay a higher interest amount at the end of the loan tenure. The reason is that the method of interest calculation differs among lenders. Therefore, you must understand this method of calculation before applying for a personal loan.
Moreover, your lender may offer a loan at a flat or a reducing interest rate. A flat rate means that the payment of interest is determined on the loan amount and remains unchanged throughout the loan tenure, whereas a reducing interest rate means that the interest payment is calculated on the outstanding principal amount. EMIs gradually reduce the principal amount
In a nutshell
It would be prudent to check what your lender offers concerning their service terms. It would also be wise to base your decision on the repayment loan tenure, processing fee, prepayment charges, and the loan amount.