Getting a Personal Loan is a great solution when money is needed that savings can’t cover. However, getting a Personal Loan can be complex, and the interest rates are usually high: varying from 7.90% p.a. – 49% p.a.
Personal Loans are a great way for borrowers to get the funds one needs for a big purchase, consolidating debt, or paying for a wedding – but they need to be smart about how to get them.
That means choosing the right lender and most importantly, getting the best interest rate.
Getting the best Personal Loan interest rate can be challenging if one is not careful. What makes it even more difficult is that the rates a person will be offered will vary greatly depending on the lender and their credit score.
Here are some of the smartest ways by which individuals can increase their chances of getting the best interest rates:
- Compare interest rates
Before a person applies for a Personal Loan, they should ideally compare the different interest rates offered by different lenders. This will help them determine which lender offers the best rate for their particular needs.
They can also use this comparison to ensure they get the most out of each loan without getting too caught up in unnecessary fees or penalties. With Poonawalla Fincorp, securing a Personal Loan is quick and seamless, with easy-to-meet eligibility requirements, competitive interest rates starting from 10.99% and a completely digital process.
- Fixed vs Floating interest rates
A lender can offer a Personal Loan at fixed or floating interest rates. Fixed interest rates remain constant throughout the loan term, resulting in the same EMIs.
Conversely, floating interest rates are not constant and keep on changing.
A floating interest rate is more cost-effective over time, even though a fixed interest rate is easy to calculate and manage. To further understand how these interest rates work, borrowers can use an EMI loan calculator.
- Build and keep a strong credit score
Credit scores are significant since they influence whether or not an individual is eligible for better loan terms.
Having a minimum credit score can help a person get lower interest rates on Personal Loans as compared to someone with a poor credit history.
If a person wants to build their credit score, they need to focus on paying off old debts and opening new lines of credit.
Improving credit scores will give them access to better financial tools and services at competitive prices. In addition, it will also ease their life because it lowers the risk of default on any future loan applications.
- Look for offers given by lenders
Various lenders provide seasonal promotions and applicants can take advantage during such times and avail these loans at lower interest rates.
Moreover, if they have previously borrowed from or engaged with a lender, they can also qualify for pre-approval.
- Meet the eligibility requirements of the lender
It is critical to select a lender that has easier eligibility criteria for a personal loan to get the best rates. Complex qualifying criteria can make it more difficult to gain approval for a Personal Loan application.
Lenders will have different conditions for their borrowers to meet and individuals need to check eligibility requirements with their lenders.
The eligibility conditions required with Poonawalla Fincorp are:
- The person needs to be an Indian citizen who is at least 22 years old when applying for the loan and 58 at the end of the tenure.
- Applicants must be full-time employees, and their minimum monthly salary needs to be ₹20,000 per month.
- Applicants must have at least one year of job experience, with at least two months of consistent employment at their present job.
Conclusion
When managed properly, Personal Loans can help bridge financial gaps without putting one’s assets at risk.
Finally, before choosing a lender for a personal loan, evaluate its credibility, interest rates offered, processing fees, foreclosure fees, and other fees. The deal should be transparent and have no negative financial consequences.
