Tips That Can Help You Get the Lowest Personal Loan Interest Rate
Personal loans are available at very high-interest rates – this is a statement of the past decade. Today, if you are financially aware then you can avail a personal loan at the lowest interest rate. With modern financing, personal loans are not only flexible, unrestricted and unsecured but they are also highly affordable. We can say that instant loan app sand online loans have been a game-changer.
Whether you want a salary loan or an online loan, you can easily apply online without the need of visiting the branch. Most lenders have also eased the eligibility criteria and fastened their processing speed to offer borrowers the best services on their loans.
But with so many lenders in the market, you must know the tips to choose the right lender and avail your loan at the lowest interest rate.
Tips to get the lowest personal loan interest rate
1. Do comparison shopping for your loan
This is the first and most important thing you must do to ensure that you get the lowest possible interest rate on your loan. You need to check loan offers from different lenders. Sort out the lenders offering you the required loan at the lowest interest rate. You can browse online and check out different loan comparison sites. Don’t forget to check the offers from instant loan apps.
2. Choose an app-based loan
These days, one great way to get a salary loan is to choose an app-based lender. Compared to traditional lenders, the instant loan app has much lower operational costs.Thus, they can offer loans at much lesser interest rates. Loan apps do not have the cost to maintain multiple offices, nor do they have to maintain a huge army of staff that run their business. This allows them to forward the cost benefits to borrowers in terms of lower interest rates and loan charges.
3. Maintain a high credit scor
This is a sure shot way to make sure that you get the lowest possible interest rate on an instantloan. A good credit score indicates high creditworthiness and credit discipline. Lenders often reward such people with better loan offers. You can also negotiate with your lender for a reduction in the interest rate and other fees.
4. Get a co-borrower for your loan
Many times, adding a co-borrower to your loan leads to an immediate decline in the interest rate charged by the lender. This is because when you add a co-borrower to a loan, the risk for the lender goes down significantly. This is because the responsibility of repaying the loan is shared by the two. This lowers the lender’s risk which allows them to offer loans with lesser interest rates.
5. Adjust the loan duration
Many times, lenders tend to consider loan duration as a big factor in setting up the loan interest rates. The simple reason behind this is that the longer a loan runs, the higher the risk involved for the lenders. This means that if you can adjust the loan duration, you might be able to get a low-interest rate. You can use an instant loan app calculator to find the best combination of loan tenure and loan EMI. While keeping the tenure short is smart, checking your EMI affordability is also important.
6. Reconsider your loan amount
Before applying for the loan, you must make sure that you have estimated an approximate budget. It is always better to apply for the minimum loan amount necessary to suffice your needs. This is because most lenders have a particular interest rate for a specific bracket of loans. If you exceed that bracket then the interest rate also increases. This is simply because a higher loan amount means higher risk.
7. Wait for festive or promotional offers
If your need for a personal loan is not urgent, then you might want to wait for the festive season. For example, if you want to buy home appliances, plan a trip, buy a gadget or carry out home renovation, then wait for the festive season. This is because most lenders extend promotional offers and discounts during the festive season. Check out an instant loan appto discover the bestoffers on your instant loan.
8. Look for corporate or government employee discounts
One advantage of working in a government job or a big corporate sector firm is the income stability. This is the reason many lenders offer personal loans to such individuals at attractive rates.Lenders see them as low-risk borrowers because of the regularity in their monthly income. Many times, lenders also run special offers for government employees and have tie-ups with corporate firms.So, if you are looking for a personal loan, then you must check out such offers first.
9. Presenting a stronger financial history can help bring down interest rates
This tip works particularly well for self-employed and business people who do not have a regular salary. If you want to get a loan at the lowest interest rate then you must consider presenting a strong financial record including proof of savings and investments. It is also important to have a well-documented Income Tax Return.Many lenders consider your ITR as your income proof.
1o. Mention all your sources of income
When applying for a personal loan, the higher your income, the better your eligibility. So, make sure to mention your additional income sources, apart from your salary (if any). This can include rental income, income from investments, side business income etc. However, make sure you have substantial papers to prove this income.
11. Go for a secured personal loan
If your credit score is not great or your income is not high, you can still get a high-value loan at low-interest rate, if you have an asset to pledge. Personal loans against investments are quite popular these days. You can also go for a personal loan against property or jewellery.
12. Leverage your existing relationships
When looking for personal loans, you must consider the lenders with whom you already have an established relationship. This could be the institution from where you have already borrowed or the bank where you maintain your salary account or savings account. Being an existing customer not only reduces the paperwork, but it can also bring you exciting offers on the interest rate.
Finally, it is very important to consider all facets of the loan before signing the dotted paper. Along with the interest rate, you must also consider the additional charges, the lender’s reputation, and customer experience with the lender. Having a pleasant loan experience is equally important to avoid faulty penalties and delayed loans. Reputed lenders also offer prompt customer service when you opt for pre-closure, pre-payment or loan transfer. They also send the NOC upon loan closure on time, thus saving you from unnecessary hassles.