Perhaps, a personal loan is the most sought-after type of loan today. Getting one is an easy job. You can get one within a few minutes or hours of applying for it. It is an ideal form of funding during an unexpected emergency. Combine this with minimal documentation and flexibility of purpose; this deserves the first place among varying options of financing. However, before applying for one, you should know one thing. Personal loan interest rates, in general, are quite high. You may be able to obtain one with a lower rate of interest. But that is not everyone’s cup of tea.

Availing of low-interest personal loans

People who manage to get low-interest personal loans consistently will have the following attributes:

A high credit score

Your credit score attests to your reliability as a borrower. If you have a high CIBIL score, you stand the chance of availing of a personal loan at a lower rate of interest. Pay all your credit cards on time. Stay consistent and maintain a good credit score. Lenders like PaySense prefer borrowers with a CIBIL score above 750.

You should also remain steadfast with regard to your loan repayment. If your lender notices that you have repaid previous loans on time, the person or firm may let you explore lower personal loan interest rates. In fact, this too is something that deserves your attention along with maintaining a good credit score.

 

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Expertise in comparison shopping

In-depth research will go a long way in helping you obtain a personal loan at a lower interest rate. Do research on lenders offering personal loans at lower rates of interest. The process may appear time-consuming. But at the end of the day, you can relax. You made a well-informed choice. PaySense, one of the country’s trusted lenders, is an option worth trying here. The loan application gets completed in just three steps. The agency offers you up to INR500000  as a personal loan.

Such a person will also be alert for seasonal offers. Lenders notify their customers as and when they make seasonal offers. Try to get the most from them. See to it that the offer fits into your budget.

The ability to put professional credentials to good use

You can put your professional credentials to good use when exploring lower personal loan interest rates. Let the lender know that you are working in a well-established firm. You also stand at a better chance if your company has some connection with your chosen lender.

It is also recommended that you get a personal loan from a lender who knows you. Lenders like PaySense offer lots of discounts to their existing customers. They also let you negotiate for better loans with lower rates of interest.

Stability of work and residence go a long way in helping you acquire a low-interest rate personal loan. Your reputation in your social circle and the stability of your income too would play a vital role in determining the same. 

Information on interest calculation strategies

Your lender may be giving you a lower interest on your personal loan. But you may find at the end of the month that the payment is too high for you to afford. This happens because you are unaware of the general interest calculation strategies used.

Lenders, in general, give loans either at a flat or reducing rates of interest. The interest is based on the entire loan amount in the formal scenario. This remains the same all through the tenure.

In the second scenario, the lender calculates the rate of interest based on your outstanding loan amount. Here, the rate of interest gets lower along with the principal amount. Thus you end up spending more if you go for a flat rate of interest than its reducing variant. 

Utmost discretion when applying for loans

If you are keen to get a lower interest on loans, you will practice utmost caution when availing of loans. Applying for several loans within a short interval presents you as a credit-hungry customer. Lenders are wary of such borrowers. And they naturally charge a higher rate of interest on your loan. Take a loan only if you absolutely need it.

Minimizing your credit utilization ratio too will work wonders here. If you use almost all your credit every month, lenders will perceive you as a customer hungry for credit. In such an instance, they will not even let you explore your low personal loan interest rates options.  Some may accept your loan application but charge an exorbitant rate of interest.

Pre-payment of your personal loan

Lenders love those who pre-pay their loans. And it is not a tough thing if you are someone who knows how to streamline your monthly expenses. If you get money from any other source, use it to pre-pay your loan.  Doing it not only reduces your loan repayment but also helps you save money on interest.

Taking a top-up loan, too, is an idea worth exploring. Check if your lender offers a personal loan top-up facility. This is generally offered at a lower rate of interest than the actual loan. You can get it either from your current lender or approach a new firm or person. You will have to transfer your existing loan to your new lender before you can avail of the top-up loan. This helps you save money both in loan repayment and rates of interest.

All these insights are futile if you don’t know how to repay your personal loan responsibly. And you cannot even dream of looking for low personal loan interest rates. Prepare a list of all your debts. Prioritize them in accordance with the urgency. And start repaying them in a timely manner. If you have two or more loans and credit cards, you are sure to be in a tight spot. Stay safe from such risks as much as possible.

For a responsible borrower with a high credit score, availing of low personal loan interest rates is a breeze.

Anil Sumra

Anil Sumra is a Digital Marketing Expert with more than 10 years of experience. He loves to write on various financial topics online to create financial awareness. He holds a bachelor’s degree in Finance & Management.

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