Tips to Get a Low Interest Personal Loan in India
The popularity of personal loans has been changing the scenario of the Indian lending market. As per stats released by the Reserve Bank of India, personal loans accounted for as much as 96% of non-food credits in the year 2018.
Given the competitive personal loan interest rates now offered by multiple leading financers and the unrestricted end-use, this financial product has only gained further momentum. These advances saw significant growth in the previous year, with the number of such loans availed increasing by as much as 26.9%.
However, there are certain pointers prospective borrowers should keep in mind to avail these advances at the most repayment-friendly terms.
Tips to Avail Low Interest Rates on Personal Loans
I. Maintain a healthy CIBIL score – CIBIL or credit score is a 3-digit expression used to determine the creditworthiness of a borrower. The total score is derived using the data generated in the CIBIL Information Report or CIR. Financial institutions utilise the CIR data to anticipate which applicant is more likely to repay the availed loan without faltering at it.
An individual who holds a minimum CIBIL score of 750 can easily avail a personal loan. Financial institutions decide the loan amount, tenor, interest rates, etc. based on an applicant’s CIBIL score. Applicants with a minimum or higher credit score can avail an opportunity to negotiate terms and personal loan interest rates.
An individual can check CIBIL score online to determine their creditworthiness. If the borrower holds a minimum score, they can apply for a loan according to their needs. Borrowers with a low score can do a few things to improve their personal credit score before they apply for the loan.
II. Fixed Obligation to Income Ratio – Like CIBIL score, FOIR or Fixed Obligation to Income Ratio is also a parameter to determine an individual’s creditworthiness. It is a ratio between the obligations the applicant has to meet and their monthly income.
Financial institutions consider a FOIR of under 50% as ideal when extending advances. Thus, before applying, you must make sure to employ ways to manage your debt and pay off existing advances, so that the FOIR does not exceed the ideal limit.
III. Maintain a good repayment history – An individual should repay their debts on time to keep a clean payment history. The borrower can avail a credit card and utilise it responsibly. Proper usage of the card and repaying the credit availed within the grace-period can not only help a borrower to maintain a healthy repayment history. There are few options available in the financial market to get personal loan with low CIBIL, but these loans generally require a co-applicant and are offered at steep interest rates. A financially responsible repayment history can help an applicant avail a loan at negotiable interest rates.
IV. Consider the credibility of your employer – An employee working in a blue-chip enterprise may be able to avail more affordable interest rates. Borrowers who work at a recognised or at least registered company are likely to have a better pay scale and employment stability. Accordingly, their creditworthiness is presumably higher. An individual with a fixed and sufficient income can avail low interest personal loans.
V. Maintain a stable employment history – An applicant should hold a steady employment history to avail a personal loan to suffice their financial requirements. An unstable employment history reflects that an individual has a fluctuating income which can negatively influence their personal loan eligibility.
VI. Compare lenders – To avail the most competitive personal loan interest rates along with other accompanying features, an individual should consider their options on lenders. Every financial institution offers different features with the loans they provide. By comparing the different loan terms, an individual can not only gather insight on their options but can also avail a loan sufficing their requirements.
VII. Special offers – Every financial institution notifies its customers regarding available beneficial offers. An individual who requires instant financial assistance can check for such offers.
Financial institutions like Bajaj Finserv provide such borrower-friendly offers along with affordable personal loan interest rates.
They provide pre-approved offers that make availing such financial products hassle-free while saving valuable time. These offers are available on personal loans, business loans, and home loans, along with several other financial products. You can check your pre-approved offer by sharing a few essential details like your name and contact number.
Low interest personal rates can be applied for and availed easily considering that the applicant meets the specific eligibility criteria. Refer to these pointers and also to a leading financier to avail a personal loan at repayment-friendly terms.