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  • 4 Easy Tips to Get a Personal Loan at Low Interest Rates

    Published on July 12, 2019

    Availing a personal loan is one of the most straightforward ways to arrange the funds one may require for various purposes. The popularity and demand for personal loans have shot up substantially in the past few decades, with several financial institutions offering personal loan at low interest rates. It is evident from the fact that personal loans grew at a CAGR of 20.4% from 2017 to 2018. Along with credit card dues, the total amount tied up in personal loans in India is a staggering Rs.5,76,600 crore.

    Now, if you want to avail a personal loan at a low interest rate, follow these easy tips to enjoy the best benefits.

    1. Improve your CIBIL score

    CIBIL or credit score is one of the first things that a lender checks while reviewing a personal loan application. It is a three-digit score ranging between 300 and 900. The higher the score, the better your chances of availing a personal loan.

    Most financial institutions look for credit scores of above 750. If you have a high score, not only will you find it easier to avail the loan, but also get good deals on personal loan interest rates from various lenders. As they are assured of your repayment ability and history.

    So, if you have a CIBIL score below the recommended level, you may take some steps to improve it before applying for a loan:

    1. Eradicate all your outstanding credit card dues.
    2. Pay any existing EMIs on time.
    • Check your credit report thoroughly. If you find any discrepancy, report it immediately to the concerned authorities. Mistakes on credit reports have been known to happen.
    1. If you have an old credit card with a good history, do not forego it.
    2. Try and maintain your credit utilisation ratio below 30%.

    2.Shop for the best rate

    As the interest rate for personal loans is fixed by different financial institutions differently, it is worth checking them all out and find who offers the best rates. For example, Bajaj Finserv Personal Loan interest rate starts at a relatively low 12.99%.

    Also Read: How to Improve CIBIL Score?

    However, it is not just the interest rate that you should be concerned with. There are various other charges that financial institutions levy on personal loans. So, it’s paramount that you scrutinise personal loan interest rate and processing fees and other charges like penal interest, repayment and foreclosure penalties, etc. to calculate the total cost of loan. Choose one that best fits your bill after considering all the options.

    3 Maintain a low debt-to-income ratio

    Other than the credit score, your debt-to-income (DTI) ratio is another criterion based on which a lender determines your repayment ability. Ideally, a DTI below 50% indicates that you have your finances under control and you can repay the loan amount without any trouble.

    4. Check for offers

    Many financial organisations provide attractive offers on personal loans. For example, NBFCs like Bajaj Finserv brings you pre-approved offers that make availing loans quick and easy. Pre-approved offers are available on numerous financial products including secured credits like home loans and unsecured credits like home loans and personal loans. You can take a look at your pre-approved offer by providing your name and phone number.

     

    Apart from these crucial factors, you also need to check whether you fulfil the necessary eligibility criteria for personal loan. You won’t be able to secure a loan even with a very high credit score if you fail to meet the eligibility criteria. You can easily check whether you meet those with the help of an online personal loan eligibility calculator.

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