How to find a low interest rate for your personal loan application?
While is it easy to find a lender when you apply for personal loan, as a customer, you need to be very careful when deciding on the lender. You need to be sure you are getting the best deal as well as ensure you are dealing with a reputable lender.
Lenders come in all shapes and sizes, offering you the moon on a platter; however, you need to be selective and chose the right lender. Apart from carefully reading the personal loan eligibility criteria, you need to read the fine print before finalising on the lender of your choice. You will also need to pay attention to the interest being offered by the lender, as that will determine the amount of the EMI, which is of utmost importance.
Usually you will get a low interest rate when:
- The market is competitive: If many lenders are offering loans when the economy is on an upswing, you will usually get low interest rates as lenders try to attract your attention with a low rate of interest.
- A good credit score: If you have a good CIBIL score (anything above 700), you will usually be offered a low rate of interest.
- A medium loan amount: If you ask for a loan amount that isn’t loo low or too high, you will end up getting a low rate of interest.
- Sufficient salary or income: If you can prove that your income is sufficient to meet the EMI obligation, you will usually be offered a lower interest on your loan.
- Based on your relationship: A lender may offer you a lower rate of interest if you have had financial dealings with them before, such as a bank account, a previous loan that you repaid on time, etc.
To check your loan eligibility, click here:
Apart from interest rates, however, here are other essential points to ponder as you decide on the right loan and lender for yourself:
- Loan repayment
Getting approved for a personal loan may be easy based on your credit score and current earnings. However, you need to be sure that you will be able to make the personal loan repayment with ease. Check your monthly earnings, deduct your monthly expenses and calculate whether you have enough funds to pay the EMI required.
- Are you getting the right loan for your need?
Getting a personal loan for small amounts is easy, and the money may be used to meet various needs from paying credit card debt to capital for your business to fund a home improvement project or even to help you take that needed vacation. Apart from choosing the right lender, you also need to consider what kind of personal loan would best suit your requirements. With a Flexi Loan for example, you will only need to pay interest on the portion of the loan utilized whereas when you take a normal personal loan, the interest is charged from the first day on the whole amount although you may not be using all the money immediately. A flexi loan also does not charge you an interest or part pre-payment.
- Make an educated comparison
When you look for a loan, compare interest rates from various lenders to find the cheapest personal loan. While this is prudent, you also need to compare the processing charges, pre-closure charges and document charges that some lenders levy. Don’t forget to add up all these charges and then consider which is the cheapest loan for your needs. You may be surprised to find that the lender offering the lowest interest rate turn out to be the most expensive one!
- How to choose lender
It is important to understand the following:
- Rate of interest
- Processing fees
- Loan processing time
- Ease of applying
- Money requirement
- Additional charges, if any
- Repayment options
- Pre-payment charges
The bank or lender that best meets your requirements, checking all the right boxes from the list above is the ideal lender for you. Pick a lender that not only allows for a low rate of interest, but also doesn’t charge you in case you suddenly fund yourself with extra funds and want to prepay. Also, if you are in a hurry to get a personal loan in case of a medical emergency, the speed of loan disbursal may be another factor that is important. Check all these before choosing a lender, making sure that you are dealing with a reputable and trustworthy financial institution.
- Final tips for applying for a personal loan
Once you are ready to apply for a personal loan, we suggest you shop for the best deal by enquiring with various lenders, understanding their specific eligibility criteria, the interest they offer and other charges that may be levied. Make your application only after shortlisting the lender you want to approach, since every time you apply for a loan, the same gets noted in your credit report. Too many loan applications can reflect badly on your credit score.
When you are looking for immediate approval, call on Bajaj Finserv. Personal loans from Bajaj Finserv provide online approval within 5 minutes with the loan amount being credited to your account within 72 hours. Bajaj Finserv’s Flexi Loan option further gives you benefits like part pre-payment without charges. To know more click here:
Begin your journey and calculate your personal loan EMI here: