Best ways to get a Personal Loan at a low interest rate

While you look up many offers and apply for the best Personal Loan in India, keeping an eye on the interest rate is crucial. It dictates how much and how affordable the repayment would be and directly affects the EMIs.

With low Personal Loan interest rates, you can repay them without experiencing much financial stress during the tenure. So, before applying for one, consider your future financial wellness and pay close attention to the interest rate being charged. Here are the best ways to get a low interest rate on your Loan:

1. Compare Loan offers online

Performing ample research is the first step to getting a low interest rate on a Personal Loan. Quickly compare your options and find the best Loan offer by checking different bank interest rates online. Doing so helps Loan seekers make informed decisions. Most banks offer lower interest rates, better terms, and friendly Loan conditions to existing customers since they already have their records and know their repayment habits.

2. Ensure your credit rating is up-to-the-mark

Banks accept credit scores from various credit bureaus according to their internal policy. Nevertheless, it is best that you maintain a high credit score to apply for a Loan at the lowest interest rates. Almost every bank prioritises the credit score while evaluating an applicant’s Loan eligibility and credibility. If your credit score is high, you qualify for Loans with lower the interest rates, because it showcases your credit behaviour in numeric terms.

For instance, if your score is above 630, you need to assure banks that you have repaid your past Loans on time, which is a good sign.

3. Check the current debts

Existing debts and borrowings act as barriers that banks carefully assess while determining eligibility and interest rates. These might include Business Loans, Personal Loans, Home Loans, pending Credit Card balances, etc. Those with existing debts must check before applying for a new Personal Loan. A debt-to-income ratio above 30% attracts higher interest rates due to higher chances of missing EMI payments.

4. Fulfil the bank’s eligibility criteria

Banks set different conditions for each applicant to qualify for a Personal Loan. These include your age, income, work experience, employment, credit score, DTI ratio, etc. Most of these eligibility conditions assess the applicant’s repayment capacity and financial stability. Those who meet them get low Personal Loan interest rates, reducing their financial stress.

5. Keep documents ready

Along with the duly-filled Loan application form, you must also provide your passport-sized photographs. Use your Aadhaar, PAN Card, or government ID as proof of identity and residence. Besides these, also provide relevant financial documents, including the current year’s Form 16 and pay slips, to prove regular income.

Conclusion

We depend on Personal Loans for various funding needs. Follow these tips for smart borrowing and fulfil financial needs at the lowest possible cost.