3 Things Everyone Must Know About Instant Loan in India

Summary: Are you looking for a personal loan online? You can apply for a wide range of Personal Loans such as a personal loan for debt consolidation, wedding, home renovation, home appliances and much more. Read the article to understand various factors on which loan interest rate depends.

Descriptions: Unlike a home loan or a car loan, the interest rates on a personal loan can vary from lender to lender. Also, every borrower gets an interest rate on the basis of his / her creditworthiness. It may vary from 12% p.a. to 36% p.a., depending on how well a borrower meets the eligibility conditions of the lending institution.

There are certain factors on which loan interest rates are determined. If you are planning to apply for an Instant Loan in India, it is important for you to learn these essential loan eligibility conditions, that will affect your interest rate. It is also the reason why every individual borrower gets different rate from the same lending platform.

Mentioned below are top 3 factors for personal loan eligibility and how they affect your loan interest rates:

1. Credit Score and Interest Rate has an Inverse Proportionality:

A borrower’s credit report provides vital information on the past performance of the borrower. It explains a borrower’s behavior towards handling credit, making payments of EMIs and efficiency in making other credit card bills.

A higher credit score means lower interest rates and vice versa. If you have an impressive credit score, most financial institutions will offer you best deal on a personal loan at best possible interest rate, depending on your credibility. Also, remember if you have a low credit score, the interest rates will certainly be higher, or you may even face the loan rejection.

For example, when you make each EMI payment against your debt, a point is added to your credit score. Likewise, any delayed payment or default results in bringing your overall credit score down. Therefore, it is very important to maintain a healthy credit score.

2. Higher Monthly Salary / Income means a Lower Interest Rates:

The financial institutions consider borrowers with high income as a safer bet. As the income increases the affordability of making payments also increases.

The most lending platforms provides a loan at minimum net salary ranges between INR 15,000 to INR 30, 000, however, the interest rates may be different for each borrower.

For instance, an individual with a monthly salary of INR 30,000 might get a personal loan in between 16-24%, however, a borrower with a monthly salary of Rs. 80,000 might get a lower rate of 12% to 15% p.a. from the same financial institution.

3. Reliable company means Reduced Interest Rates:

Individuals working for a reputed employer has a better job stability and therefore can fetch a better Personal Loan deal. Reason being, people of a reputed organization are considered more responsible and trustworthy towards making timely EMI payments.

Other than this, the nature of your job also affects your loan rates. Interest rates offered to salary employed are different from a self-employed professional.

In the summation!

Each aforementioned factor has an impact on your personal loan interest rate. With an understanding of these parameters, you can work together to get you a better loan offer. Alternatively, you can start by checking the Documents Required for personal Loan and eligibility criteria by visiting the websites of various lending institutions.

Faircent is India’s leading Peer to peer (P2P) lending platform in India. We facilitate P2P loans and investment services in debt products for you to borrow and lend money by means of our online credit marketplace.