How to get a Personal Loan with the right interest rate?

A Personal Loan funds your personal expenses, helping you fulfil them. Finding a Personal Loan with the right interest rate makes a big difference to your monthly budget. However, getting the right interest rate depends on several factors. Here is how to improve your chances of securing the best possible interest rate:

Maintain a decent credit score

A decent credit history indicates that you are responsible for your finances. Banks may offer you a Personal Loan with the right interest rate if your credit score is high. However, if your credit score is low, take steps to improve it. Pay your dues on time, use your credit limit only partially, and regularly review your credit report for any errors.

Keep a steady income

Banks prefer applicants with a stable job and steady income. It gives them confidence in your ability to repay. You are considered a low-risk borrower if you are a salaried individual with a regular monthly income.

Select a shorter tenure

The tenure you choose affects the interest rates. A shorter repayment tenure helps lower the total interest rate. Most banks offer flexible tenures from 12 to 84 months. Pick a tenure that best suits your budget and helps lower your total interest rate.

Check associated charges

Always check the additional charges, such as processing fees, foreclosure charges, and part payment charges, associated with the Loan. Checking the fees in advance ensures that you do not pay unexpected charges later.

Compare Loan offers

Before applying for a Personal Loan, compare the various options offered by different banks. Do not choose the first offer that you see. Take your time to research and compare their interest rates. Then, choose the one with a competitive interest rate, the best terms, and the most benefits.

Understand interest rate types

Fixed and floating rates are the two primary interest rates. Your EMI remains the same throughout the fixed rate period. Meanwhile, floating rates mean it may decrease as you repay. Therefore, understanding the interest rates helps secure a Personal Loan with the right interest rate.

Highlight your profile

Some banks offer competitive interest rates to selected applicants. They may consider your employer, job role, or income. A good profile may get you special offers. Therefore, before you apply for a Personal Loan, highlight your best financial features.

Look for seasonal offers

Banks sometimes run festive offers or seasonal deals on Personal Loan interest rates. Thus, stay alert about such offers, as they are usually only available for a short time. You can also sign up for updates or check the bank's website to stay informed.

Conclusion

Getting a Personal Loan with the right interest rate is easy. You must maintain a decent credit score and have a steady income, among other requirements. If you follow the tips mentioned accurately, you can easily secure a Personal Loan with the right interest rate.