When you need instant money and don’t want a headache, a Personal loan is there to your rescue. Availing a Personal loan can come in handy whether it’s a medical emergency at home, a wedding, a vacation, going abroad for higher education, or there is a home renovation that you’ve been planning on doing for a very long time.
A personal loan can be availed from banks/NBFCs-Non-banking financial institutions with little or no paperwork. Banks or other financial institutions decide a personal loan rate of interest, which varies for different banks/institutions. There are various ways by which you can avail a loan with a low personal loan interest rate.
Before availing a personal loan, you can keep these tips in mind to help you avail the cheapest rate of interest
A high credit score or CIBIL score is an indicator of your creditworthiness. Banks and NBFCs offer a low rate of interest to applicants with a high credit score. A credit score ranges between 300-900. 300- very poor and 900-fantastic.
A credit score of 750 and above means you have a higher chance of availing your personal loan at a low-interest rate. So, if your credit score is low, try to improve it and get lower interest rates.
Make sure you avoid missing any repayment. If you miss a loan or a credit card repayment, your credit score gets badly affected; and mind it, all banks and NBFCs ask for your repayment history before deciding on a rate of interest. Therefore, to have a low rate of interest, you must make repayments on time.
Before applying for a personal loan, remember to compare the interest rates of all banks and non-banking financial institutions. This competitiveness in the market will help you avail a personal loan at the lowest interest rate possible.
Keep an eye on offers, especially during festive seasons. Most banks and financial institutions offer a low rate of interest for a limited time period. You can make the best out of this opportunity by keeping a check on offers.
When you’re an existing customer or you know the loan provider personally, you can always negotiate for a lower interest rate. It is advisable that you submit a formal request to the loan provider and let them know. Negotiating on a personal level is also an option if you are on good terms with the bank or financial institution. Availing a personal loan is the easiest way to fulfill your financial needs quickly. Out of all the factors mentioned above, the CIBIL score or the credit score is the most crucial factor in helping you get a personal loan at a low rate of interest. So, always maintain a good credit score and keep checking the score to ensure that it never goes awry.