A personal loan can finance large expenses such as education, marriage, home renovations, as well as various emergencies. To optimize your user experience, look for the various benefits offered by lenders, such as flexible repayment tenure, online applications, and fast loan disbursements.
Transferring balances from existing personal loans and credit cards at favorable rates can be an added benefit. Also, try to get a low interest personal loan to pay it off easily.
Here are five essential tips for getting the best rate on a personal loan:
Boost Your Credit Score
A high credit score (over 700) can help you get a low interest personal loan. Such a score is supported by a good credit history. Thus, the lender can be sure that you can repay the loan on time. Try to improve your credit score and history by making full and on-time payments of your credit card bills and paying off all loans early or on time.
Maintain a good loan repayment
The lender not only checks your CIBIL score but also checks your loan repayment history before determining an interest rate for a personal loan. Banks typically lend to people who have not defaulted in the past 12 months. Even if a new loan is given to a defaulting debtor, the interest rate can be high. So establish and maintain great discipline in loan repayments to increase your eligibility for a low interest rate on a personal loan.
Use your professional references
You can make the most of the following professional qualifications to qualify for a personal loan at a competitive interest rate. The higher your income, the easier it is for you to make regular loan repayments. Thus, the chances of getting a loan approved at better interest rates increase. To do this, produce valid proof of income such as income tax returns.
The lending bank also checks the reputation of the company you work for. If you work in a reputable organization, the lender will assume that you have a stable career and that you can repay the loan on time. So, you can benefit from a low rate of interest on the personal loan.
Benefit from a good banking relationship
Prove that you are a loyal customer of your bank with a good history of opening and managing your term deposits
and savings accounts. A good relationship with your bank can improve your eligibility for a personal loan at attractive interest rates.
Compare interest rates from various lenders
First, compare the interest rates offered by different lending banks. Then choose the bank offering the lowest personal loan interest rate. If the bank allows a digital paperless application, apply for a loan online and enjoy instant disbursement.
Remember to calculate the Equivalent Monthly Payments (EMI) based on your loan amount, interest rate and repayment term you have chosen using the personal loan calculator on the website of the Bank. This will help you ensure that you regularly pay for IMEs during the specific term.
Source: Tax Guru