When it comes to taking a personal loan, many people often fail to get it due to various mistakes such as not meeting the eligibility criteria and not having the required documents. But it is important to know how to get a good personal loan interest rate. In this article, we will discuss a few of the methods to secure a good personal loan interest rate.
When providing loans to consumers, lenders always take into consideration multiple factors such as credit score, monthly income, and employee profile. Let us take a look at how one can get a better personal loan interest rate.
Maintain a good credit score
People who often have a credit score of 750 or more have a higher chance of getting a personal loan at a good interest rate. They also have a better chance of getting their loan sanctioned. Lenders will see the credit score and determine whether the borrower is trustworthy and will repay the loan amount within the stipulated period. If you have a credit score of 750, the lenders are likely to provide you with a preferential interest rate.
Make sure you repay the loan amount within the stipulated period, and this will ensure your credit score stays high. Also, it is advised not to take multiple loans and credit cards at the same time as this can impact your credit score negatively. It is important to review the credit report at a regular interval such as three months to check whether the credit score is healthy. Each credit bureau will offer you a free credit report each year.
Have a good bank relationship
It is important to opt for a bank or NBFCs with which you already have an existing customer relationship when opting for a personal loan. Many banks call this loan a quick loan or a top up loan. There are many lenders who are ready to provide personal loans to the borrowers. But make sure to opt for a bank or NBFCs with whom you are already working as they offer the customers preferential personal loan interest rates.
The relationship with the bank can be through various means such as current account, savings account, salary account, fixed account, recurring account, or existing loans and credit cards. For this reason, people who are looking for loan refinancing should first search the NBFCs and banks with whom they have an existing banking and lending relationship. They are more likely to provide you with a better interest rate when compared to other lenders in the market.
Interest rate comparison
With the advancement of science and technology, it has become easier for people to compare various interest rates online that are offered by different banks, NBFCs, and lenders. This has made it easier for people to choose the right interest rate and not apply for the first quote they receive for a personal loan. The interest rate offered by banks and NBFCs can vary from 10% to 24% per annum.
Approval for a personal loan may vary depending on the lenders. Due to the easy access to the internet, people should first compare the various personal loan interest rate before opting for the right lender. But it is essential not only to compare the interest rate. People should also look at the repayment tenure, loan amount, processing fees, and prepayment charges before choosing the lender.
Make sure to keep the above discussed points in mind before you choose the right lender to get a better personal loan interest rate. It is important not to choose the first lender and always look at the other options before making the decision.