5 Tips To Get Low Personal Loan Interest Rates

Many unforeseen situations in life require financial expenses like health, marriage, education, etc. Conditions change at any time, and the best way to tackle them is to prepare well mentally and financially. Instead of borrowing money from relatives and kins to meet your expenses, you can rely on banks and financial institutions for help.

Collateral-free nature, no end-use limitation, and wide availability make Personal Loans the most popular financial instrument when dealing with temporary and sudden financial crises. They have a broad market, including nationalised banks, DSAs, financial institutions, etc. Lenders offer the best rates, but you need to be careful while applying as a borrower. Here are some tips to get low-interest rates:

Maintain a good CIBIL score

A CIBIL score of 750+ is decent and increases your chances of approval for new credit. Additionally, it empowers you to get an ideal tenure at reasonable Personal Loan rates. All this depends on your CIBIL score as it reflects your financial health. Therefore, you need to maintain a good credit score for low-interest rates on loans.

Interest calculation

It is essential to check the method used by the bank or lender to calculate the interest rates. You get a low-interest loan but pay more as you end the term. It is because most lenders offer loans at flat or reducing interest rates. While applying for a Personal Loan for salaried, check your income and repayment capacity.

Comparison

The cost of borrowing depends on the interest rate of the loan. Since there are many banks and lenders in the market, you should compare the Personal Loan eligibility criteria before applying. Visit an online financial marketplace and compare the offers to get the best deal and discounts. You can also use the banking app for convenient access and application.

Employment stability

The most important thing that lenders consider is the borrower’s repayment capacity. Having a fixed income source while applying for a Personal Loan for self-employed with job stability adds to the benefit. It also helps you get loan approval at lower rates as lenders are sure about the repayment.

Other parameters

The interest rate affects your overall borrowing cost and the processing fees and taxes like GST. You should consider the processing fees and applicable charges while calculating the estimated amount on the Personal Loan calculator in India. Check out the hidden costs and special offers to reduce the debt burden.

When lenders charge flat interest rates, it gets calculated on the entire principal throughout the tenure resulting in high amounts. Meanwhile, the interest is calculated on the outstanding principal amount to reduce interest rates.

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