Are you looking for a personal loan at a low interest rate? How can you negotiate for a rate that will suit your requirements? Is there any way to get the bank approve your loan at a lowest possible rate even though you are not an existing customer? We will guide you through ways of getting best personal loans rates and offers from banks and NBFCs.
- Enhance Your Credit Score
A positive credit history will keep your credit score high. A good CIBIL score of 700+ will fetch you ideal interest rate on personal loans. If you do not have a strong credit score, you can check the credit report for errors and get those fixed, along with maintaining a sound payment history. Make on-time payments and use your credit cards wisely.
- Check Out Top Banks and NBFCs Offers
If your loan application gets rejected by a financial institution, it does not mean any other bank/NBFC will not provide you the funds. It is appropriate to check with top banks and NBFCs in your city to find whose eligibility criteria you meet. You can negotiate for a better rate of interest by emphasizing on your repayment capacity and income history.
- Get Interest Rate Offers from Different Lenders
Each lender has a certain criteria for approving a loan. It is advisable to get rate offers from providers and then compare those. Some financial institutions offer personalized rates depending on your profile and income. They may do a soft credit check based on your income proof and bank statement, so that you will get an idea of the lowest rate that you can secure.
- Go Beyond Base Rates
You have to compare personal loan APRs along with base rates. As interest rate influences the total loan cost, it cannot be avoided. However, you should check for application fee, origination and processing charges, and other costs that come along. Compare the annual percentage rate of every personal loan offer you receive. The APR includes all interest, fees, and costs, which are incurred on the loan. In case you are not able to get a lower interest rate, try negotiating the fees and charges.
- Personal Loan Co-signer
It is uncommon to get personal loan with co-applicants, but some financial institutions allow such facility. If you think your credit history and income is not up to the mark, you can choose this option and ask for a better interest rate. Adding a co-applicant may even boost the amount of loan you can get.
- Choose a Shorter Tenure
The faster you pay off the loan, the lesser interest you will pay. As personal loans are unsecured, the lenders are open to prepayment option. They may give best loan rates for loans of short-term, say 2 to 3 years, as compared to 5 years. However, when opting for prepayment, you need to take into account the charges involved.
- Variable Rate vs. Fixed Rate
Usually personal loans entail a fixed rate of interest. But if you are opting for a shorter-term, speak with the financial institution for a variable rate. When the rate switches to a lower one, your personal loan interest rate will also come down. However, there is a risk involved as the rate can also surge. When going for a variable rate of interest, make sure other fees and charges are low and tenure is short.
The above-mentioned are tips to get the best interest rate for personal loan. Go through these well to secure the perfect loan offer.