A personal loan is one of the simplest of ways to get funds for emergency expenses. However, one of the most important concerns when applying for a personal loan is its interest rate which is generally higher than most other types of loans. If you are planning to apply for a personal loan, we have created a list of some useful tips that can help you get the best personal loan interest rates.
During a financial emergency, a personal loan can be an excellent option. These loans are generally processed within 2-3 working days and do not even require any kind of collateral. However, a major concern with these loans is their interest rates which are higher than most other types of loans. But that doesn’t mean that you cannot get the best deal on such loans.
We have created a list of some handy tips that can help you avail a personal loan at the best interest rate.
- Make sure that you have a good CIBIL score
Your CIBIL score is what lenders now check first when going through your loan application. The higher your score, the better are the chances of your loan application getting approved. It is generally recommended that your CIBIL score should be above 750 to get best deals on loans. So, check your CIBIL score and if it is above 750, you can try to negotiate the personal loan interest rates with the lender to get a better deal.
- Ensure that you fit the eligibility criteria of the lender
The eligibility criteria for personal loans slightly vary between lenders. Check the eligibility criteria of multiple lenders to make sure that you find one whose criteria you fulfill perfectly. Along with a good CIBIL score, your eligibility can also help you get a better deal.
- Keep searching
Make sure that you do not settle for the first lender who is ready to lend you a personal loan. If one lender is lending, there is a major possibility that others might lend as well. So, make sure that you keep searching and short-list at least 2-3 banks to ensure that you pick the best deal.
- Don’t forget to check the additional fee
Apart from the interest rate, it is also crucial to check the extra charges like processing fee, pre-payment charges, refinancing costs, etc. If a lender is offering the personal loan at a cheaper rate, but these charges are high, it can significantly affect the amount of money that you were planning to save with a cheaper rate.
- Have a good employment history
Long employment history with a reputable organization is a major green signal for the lenders as it works as your employment security. Banks believe that you will continue working at the same reputable organization in future too and would be able to repay the loan easily. So, if you do have an excellent employment history, you can try to get the interest rate reduced by negotiating with the lender.
Use these tips when applying for a personal loan to get the best deal. Make sure that you thoroughly check the terms and conditions of the loan when applying to avoid any kind of discrepancies in future.