Five Ways to Avail Personal Loans at Better Interest Rates

The personal loan sector of India is increasing and advancing every other day. Studies by RBI say that the net profits from personal loan in 2019 alone were Rs. 22.5 lakh crores in India. The lenders are becoming flexible and transparent in their terms and conditions. Furthermore, people find it easy to avail personal loans to meet sudden financial needs like marriages, buying real estate, purchasing vehicles, etc. You might also have thought of taking personal loans or have already made it at some point in your life. The most critical part you need to take care of is interest rates. It is difficult to get personal loans with lower interest rates. But it is possible to avail the loan with the lowest interest rates reasonable.

Follow the steps mentioned below, and you get this advantage to the extent that can save you from higher repayment amounts:

1. Better your CIBIL score, lower are your interest rates: CIBIL score represents your credibility in the market in terms of a 3-digit expression. The credit score is governed by many parameters, some of which are your income, previous loans, pending repayments, debts, etc. 750 is the minimum CIBIL score required to avail a personal loan. A score higher than this will be an excellent feature basis which you get a chance to alter the norms and lower the interest rates of your loan to a considerable extent.
2. Never upset the history of your repayments: Repay all loans availed in the past as per commitments made with the lender. Decide the EMI that is feasible for you. Your repayment history is a representation of your financial stability. Poor repayment ability lowers your CIBIL score. Now you need a co-applicant with a higher credit score to avail loans at lower interest rates.
3. Your employment history should never be weak: A good employment history is an indicator of your abilities to work in the market and earn money. Stable employment is directly related to your excellent repayment abilities. On the other hand, unstable employment goes as a sign of your financial instability. This further adversely affects your loan eligibility. Here, you miss the chance of negotiating with the lender for interest rates.
4. Better credibility of your employer adds a bonus point to your credibility: The place where you work can also be a criterion resulting in changes in your interest rates. If you are an employer of a blue-chip/stable company, it contributes to your CIBIL score. The concept behind this is that the lender gets the assurance of timely repayments looking at your steady and higher income which in turn gives you a chance to avail the personal loan at lower interest rates.

5. Compare the lenders in the market and don't forget to search and opt for seasonal offers: Never settle for a lender before doing sufficient research. The retail market for personal loans is a vast competition in itself. You may find some good lenders offering lower interest rates on personal loans. But it would help if you searched for them. Moreover, there are offers valid for specific seasons in personal loans. Grab this opportunity and get your loan at an interest rate that is lower than the regular prices.

Thus, being wise and managing your financial stability makes you fit for availing higher amounts as personal loans, that too, at an affordable interest rate.

I am Rahul Kumar, a professional Financial Analyst. I have done MBA in finance and worked in various finance organisations. I have five years of working experience and I am also fond of writing about personal financing.