A personal loan is any purpose loan. You can use this loan for any purpose like medical emergency, marriage expenses, renovation of a home, paying dream holiday, etc. It is one of the easiest ways to get money from the market. The interest rate offered on a personal loan is generally higher compared to any other loan. However, if you have an urgent requirement for money personal loan is a very good option. You must be aware that many banks sanction and disburse the loan within 24 hours of your application. Even a few banks and lending organizations gives pre-approved loan offers.
So, if you are planning to avail of a personal loan and want to reduce a cost by getting a low interest rate here are proven ways.
Also Read – 10 Best Instant Personal Loan Apps for Quick Cash Requirement
How to Get a Personal Loan with a Low-Interest Rate?
Maintain a Good Credit Score
A credit score plays a crucial role in deciding your loan amount, interest rate, and processing charges. You need to maintain or improve your credit score by repaying your debt over a period of time. Your credit score should be above 750. A credit score above 750 means a very good chance of getting one of the best loans for low-interest rates. There are multiple ways to maintain and improve your credit score. A few of them are listed below.
- Pay bills on time
- Keep your credit card balance low
- Limit your application of new credit card and loans
- Maintain a credit utilization ratio
- Check your credit report at regular intervals
Employment History
Your employment history also plays a vital role in reducing the personal loan interest rate. If you are maintaining good job stability it affects your credit score positively. In addition to your employment history, a few lending companies also look at factors such as repayment capacity, income, and profile to decide on a personal loan interest rate.
Credibility of Employer
The credibility of an employer is one of the important factors in reducing personal loan interest rates. If you are working with blue-chip companies or multinational companies your chance of getting a personal loan with a low interest rate is high. The reason is the employer is able to provide steady and higher job security with a stable income.
Repayment History
Repayment history is crucial for getting a personal loan at a lower rate. Pay your credit card bill on time. Pay the EMI of your loan on time. If your repayment history is good you get a better chance to negotiate interest rates with lenders.
Monthly Income
It may sound unfair but your monthly income also matters a lot when deciding personal loan interest rates. Your monthly income should be high to get a good deal on a personal loan.
Relationship with Bank
Your relationship with the bank also matters a lot while applying for a personal loan. If you are a loyal customer of a bank and maintain all your transactions with the same lender or bank, your bank/lender is likely to offer a personal loan with low interest rate.
Personal Loan Interest Rate Comparison
Another best way to get a personal loan with low interest rate is via comparison. To help you here is a list of banks offering personal loans along with interest rate details.
Check Alternatives
You should check for other alternatives when seeking a personal loan with a low-interest rate, exploring alternatives like commercial hard money loans can offer distinct advantages. While traditional personal loans often come with stringent eligibility criteria and lengthy approval processes, commercial hard money loans provide a viable option for individuals seeking quicker access to funds. These loans, secured by commercial real estate, offer competitive interest rates and flexible terms, making them an attractive option for borrowers with substantial assets or businesses in need of capital. By leveraging the value of commercial properties, borrowers can secure financing with favorable terms, enabling them to meet their financial needs while minimizing interest expenses.
Over to You –
Before taking a personal loan make sure that your need is unavoidable and can be fulfilled by only a personal loan. Because the higher interest rates of personal loans will put you under great financial pressure. Ask the following questions yourself before taking a personal loan.
- Do I really need a loan?
- Can I postpone my expenses?
- Can I manage without a personal loan?
- Is it possible to get the money from somewhere else like friends, relatives, or a part-time job?
