While the shortage of funds could halt your plans, whether pursuing higher education or taking a holiday with your loved ones, it can become a cause for unending stress and give you sleepless nights. With several available borrowing options, including your family and friends, obtaining a personal loan from a financial institution seems quite reasonable in current times. Offered by the lender without asking you to pledge any valuable asset as collateral against the loan money, a personal loan can be used for various purposes such as home renovation, business expansion, organizing a marriage function, etc.
Depending on the eligibility and requirements, a candidate could apply for a personal loan online and get the amount deposited in your account within a few days. For instance, to get a Fullerton India personal loan, you can easily apply online on the website or through the Instaloan app (salaried applicants only), and acquire the funds without any hassle. While a personal loan is usually offered at an affordable interest rate, a candidate with a good CIBIL score and high monthly income can negotiate with the lender to lower the rate of interest, which would reduce the EMIs and the total repayable amount.
Scroll down to know about numerous ways to get the best personal loan interest rate.
- Healthy credit history
Maintaining a credit score of 750 or above is one of the primary ways to secure low interest rates as a healthy credit score demonstrates your debt-handling and loan repayment capacity to the lender. You can uphold and improve your credit score by paying off existing loan EMIs or credit card bills in full within the due date. The higher your credit score, the better position you are in to negotiate with the lender regarding interest rate and loan tenure to reduce the overall repayment amount. Besides proving your creditworthiness and lowering interest rates, healthy credit history also helps in availing additional benefits from the financial institution.
- High monthly income
Another critical component that gives an upper hand in procuring a low-interest rate is your high monthly salary. It substantiates your capacity to repay the loan amount in time without any default. Even though a person with a low income can also obtain a personal loan, a higher salary will boost your profile to get a personal loan with a low-interest rate. Additionally, the nature of your employment can play a significant role in the matter because if you work as a government employee or are a salaried professional with a multinational organization, the lender will view it as a steady source of income and provide you with a better rate of interest than usual.
- Compare interest rates
Decided by the lender, interest rates are significant in calculating the final repayable amount for any loan. Therefore, you must do thorough research about the interest rates offered by different financial institutions on the same loan amount before finalizing your lender. You should also check and compare the EMI with the online personal loan EMI calculator by entering loan parameters, including interest rates, to get the best deal.
- Short repayment tenure
Another critical aspect to focus upon while obtaining a personal loan is the loan tenure. The borrower is expected to repay the loan amount and the interest rate. Generally, between the range of 1 and 5 years, you can negotiate with the borrower for a shorter tenure, would ensure that your overall interest payable would be lower.
- Relationship with the lender
Your association with the lender also affects the charged rate of interest. For instance, if you are a loyal and valued customer of a financial institution who has repaid your previous loan or credit card bills on time, the lender is inclined to offer you better interest rates on personal loan based on your disciplined history.
- Promotional offers
Last but not least, you should also keep a lookout for special promotional deals provided by financial institutions to their customers. Whether a limited-period discount based on your monthly income and credit score or a pre-approved loan with additional benefits, the special offers could prove to be quite helpful for acquiring the personal loan at a low rate of interest, especially during festive seasons.
