Unexpected situations occur that require financial expenses, such as health, marriage, education, etc. Conditions change at times, and the best way to tackle them is to prepare financially and mentally. Instead of borrowing money from loved ones to meet your expenses, you can rely on banks for help.
No end-use limitation, collateral-free nature, and wide availability make Personal Loans a popular financial instrument to deal with financial crises. They have a broad market, including nationalised banks, DSAs, financial institutions, etc. They offer the best Personal Loan rates, but you need to be careful while applying. Here are some ways to get low rates:
Maintain a decent credit score
A credit score of 700 and above is decent and increases your approval chances for new credit. Additionally, it empowers you to get an ideal tenure at a reasonable Personal Loan interest rate. This depends on your credit score, as it is the reflection of your financial health. Therefore, you need to maintain a good credit score for low interest rates.
Compare offers
The borrowing cost depends on the Loan interest rates. Since there are plenty of lenders, compare the eligibility criteria. Visit an online financial marketplace and compare the offers to get the best deals and discounts. You can also check your smartphone app for convenient access and application.
Interest calculation
You need to check the method used by the lender to calculate the interest rates. You can get a low-interest Loan, but you may end up paying more as you end the term. This is because most lenders offer Loans at flat or reduced interest rates. While applying for a Personal Loan, you should also check your income and repayment capacity.
Employment stability
The most important thing that lenders consider is your repayment capacity. Having a fixed income source while applying for a Personal Loan adds to the benefit. It also helps you get Loan approval at lower rates as lenders are sure about the repayment.
Other factors
It is the interest rate that affects your borrowing cost and the processing fees and taxes like GST. You should consider the processing fees and applicable charges while calculating the estimated amount on the calculator. Check out the hidden costs and special offers to lower the debt burden.
When lenders charge flat interest rates, it gets calculated on the principal amount throughout the tenure resulting in high amounts. Meanwhile, the interest gets calculated on the outstanding principal amount in reducing interest rates.
