A personal loan is that additional chunk of money that one requires for immediate purposes. It could be for a healthcare emergency, debt consolidation, or any other large purchase. Furthermore, the convenience and lower interest rates have put the reason for getting a personal loan under a broad spectrum. However, with immense competition between loan providers, it is imperative to opt for providers offering the best interest on personal loans. Clueless about how to choose one?
We have got you covered!
Personal Loan- Stats and Facts
A Personal Loan typically ranges between $100 to $50,000, with interest rates falling between 3 and 36 percent. Since the majority of the providers offer unsecured personal loans, a borrower need not submit any collateral in that case. The improvement in financial technology has added to the accessibility and convenience of obtaining a personal loan. RBI data shows that the bank’s personal loan outstanding stood at Rs 32.5 trillion in June 2022. Furthermore, the branch has continually been registering a 2-percentage point growth every month. This is a sign for you to opt for a personal loan in Kolkata next time you are looking for a quick influx of cash.
Factors Influencing Personal Loan Interest Rate
With the application system going online, getting a personal loan has become easier than ever. But, certain important factors within the application require your attention. Once you get hold of the sense behind these, you can be allowed to have the options with optimum interest on the personal loan.
- Credit Score: As crucial as it could be, Credit Score indicates your creditworthiness i.e., reflecting how likely you are to pay a bank loan. Essentially, it is a three-digit number, ranging between 300-900. An ideal credit score to obtain a personal loan is above 750. The higher the score, the lower the interest banks will charge on your current loan.
- Employment Stability: A bank or a loan-providing firm always prefer borrowers who have been consistently employed rather than freelancers. Having a sincere job history might allow your loan to get approved at the best interest rates.
Tips To Get a Lower Interest on Personal Loans
While it’s important to consider your financial lending before applying for a loan, having a lower interest rate may release some extra burden. Here are a few recommendations for getting the best deal:
- Compare Interest Rates
This may sound like a general recommendation but it weighs heavy on importance. While the primary banks may delude you into getting a personal loan from them, you should have your research. Apart from banks, there are umpteen private lending firms that might offer you a personal loan at a lower interest rate. It’s always good to look for more than 5 options to compare the interest rates.
- Maintain a solid credit score
We cannot emphasize enough how crucial credit scores are in fetching the best interest rates. A high credit score gives out such a good impression of your sincerity. Make sure you pay all your EMIs and credit card bills on time to maintain a score of above 750. So, next time if you are lazy to pay the loan instalment, let the essence of maintaining the credit score haunt you.
- Use your negotiation skills
If you comply well with the eligibility criteria, you can make your move by negotiating the interest rate offered. Remember, the fruits of your negotiation are somewhat dependent on your credit score and income. Some decent negotiation skills coupled with high CIBIL and income can do wonders for you. Give it a try!
- Stay updated with the latest offers
Most banks and private lending companies slash interest rates in festive seasons or national occasions such as Independence Day. The catch is to keep an eye on special offers. It is recommended to pay a regular visit to the websites of lenders or subscribe to their newsletters to receive profitable news in time.
Not long ago, personal loans were a hard nut to crack with extensive paperwork and finding the optimal interest rates. However, with the advancing financial technology, the process has become less cumbersome. The online system has eased the application whilst getting the best interest on personal loans. The trick lies in having your research and staying updated at all times to fetch a sweet deal.
