One of the best financing options in the market these days is a personal loan. Be it for your own wedding or your child’s wedding to fund the purchase of a new appliance, you can get a personal loan for various purposes.
Factors to Keep in Mind Before Applying for a Personal Loan
Despite the many sources by which one can apply for a personal loan, getting low interest personal loans is not an easy task. Often, people are unaware of the ways by which they can obtain a loan, be it of any type, at lower rates of interest. However, one of the major reasons behind the same is that lenders, be it banks or other financial institutions, take into consideration multiple factors before deciding to lend money to someone. Let us take a look at some of the important factors that determine if one can avail a personal loan or not and the ways by which one can improve on them.
Have a Good Credit Score:
Since a personal loan is unsecured, it is not backed by any collaterals. Therefore, in such a case, having a strong credit score is an essential criterion. A credit score is a numerical value that measures the ability of a person to pay back their credit on time. It represents the creditworthiness of an individual, thus, the higher the credit score, the higher is the creditworthiness of the individual. Today, several lenders prefer to look at a person’s credit reports before approving their loans.
Hence, with a good credit rating, it becomes easier for you to avail a personal loan, as the lender knows that you will be able to repay the loan amount on time. Additionally, having a strong credit history puts you in a position to negotiate for lower interest rates.
There are various agencies that can help calculate your creditworthiness. However, one of the most reliable credit rating companies in the market is CIBIL. To know your credit rating, you can check your CIBIL score online for free. The CIBIL score is a three-digit value, ranging between 300 and 900. Your CIBIL score will tell you your creditworthiness based on how you have managed to repay your debt in the past. The higher the score, the better. Ideally, a score of between 700 and 750 will make you a strong candidate while seeking a personal loan.
Try to Avail Seasonal Offers:
In order to get low interest personal loans, pay attention to seasonal offers, which are commonly offered during the festive season. With seasonal offers, you can also avail of facilities like zero processing fees, customized pre-approved loan deals, and limited period discounts on interest rates.
Compare All Offers:
Before you decide to apply for a personal loan, don’t forget to check the interest rates offered by different lenders. With all information available online, you can easily visit the websites of various banks and financial institutions, compare their offers and interest rates, and then apply for a personal loan. Furthermore, you can also check with your existing creditors for borrowing a personal loan, as very often, they may offer you a loan at interest rates which are lower than what is offered in the market, as well as a longer payback period than other banks or financial institutions.
Check the Method for Interest Calculation:
Before you apply for a personal loan, ensure that you understand their interest calculation methods. Being aware of the interest calculation is important because while some lenders may offer loans at a flat interest rate, where the interest payments are calculated on the entire loan amount, others may offer a loan at reducing interest rates, where the interest is calculated on the remaining principal amount. Having full knowledge of a lender’s interest calculation method will save you a lot of time and money, as you can avoid paying higher interest on your personal loan.
Have a Good Repayment History:
Be it your current loan or future loans, inculcate the habit of repaying your EMIs as well as other debts like credit card bills, on time. Timely repayment of loans will not only improve your credit score in the future, but you will also be in a better position to avail loans of any type, and negotiate for better interest rates.
Make Sure you Use your Professional Credentials:
In order to get a low interest rate on personal loans, you not only need to have a good credit history. Factors such as where you work and your annual income can also help determine whether you qualify for a loan or not. Having a job in a reputed firm or working at a higher position can go a long way in helping you to negotiate for a lower rate of interest on your personal loan since the financer is confident and knows that you will be in a position to return the loan amount on time.
In case you are still unable to decide where to obtain a personal loan at good interest rates, avail Bajaj Finserv Personal Loan available on Finserv Markets. Get instantly approved personal loans without any collaterals. With a flexible repayment period ranging between 12 and 60 months and a hassle-free application process that is completely online, the Bajaj Finserv Personal Loan is beneficial in many ways. And the best part is that with minimal documentation and procedures, your loan will be approved in just three minutes.
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