Khadamia

5 ways to get the best rate of interest on your personal loan

    Rahul Singh

    0/5 stars (0 votes)

    A personal loan is one of the best credit options to fulfill an immediate requirement for funds. Not only can you avail a personal loan to pay off your debts, but it also makes it possible to meet wedding expenses, fuel urgent medical requirements, take an overdue vacation with your family, or make the down payment for your new home. The uses of a personal loan are endless,  but the main challenge is finding the most favorable interest rate on the loan.

    It is not as easy as it seems. Several intermediary factors influence the interest rate. You won't get the best deal if you fail to consider them. However, if you are not aware of these factors, here are some ways to get the best interest rate on your IDFC First Bank personal loan.

    Have a good credit score

     

    The first thing you should do is maintain a credit score higher than 750. Credit or CIBIL score determines your credit history, like debt repayments, total debts on your name, late payment charges, etc. If your score is low, it signifies your incapacity to repay debt on time. As a result, the risk to the lender is higher, and consequently the lender may charge higher interest rates to avoid losses on their part.

    Learn floating and fixed rates

    Most lenders offer two interest rate types on a pre-approved personal loan. First, fixed rates do not change throughout the repayment tenure, no matter how much you have repaid. Therefore, even when you have significantly less principal to repay, you need to pay a higher interest rate.

    Similarly, if we consider the floating interest, you will have the leverage to pay a flexible interest according to the principal still in debt. However, fixed interest rates are not subjected to market inflation like floating rates.

     

    Go for different offers provided

    To get the best deal on interest rates charged on personal loans, you should check different offers from different lenders. For instance, IDFC First Bank offers a 1% flat discount on personal loan balance transfers as long as the minimum interest rate is 10.49% p.a. Similarly, you can benefit from the interest charged if you are a returning customer. Therefore, researching the offers provided by lenders will help you ensure you get the best deal.

     

     

     

    Compare interest rates

     

    Always compare the interest rates charged on different loan types. For example, a pre-approved loan has a lower interest rate than others. Similarly, you will find several differences when you compare interest rates offered by different lenders. Therefore, you should keep an eye on the rates and compare them carefully before choosing the best deal.

    Keep all income papers updated

     

    When you learn how to apply a personal loan, you might come across the need to submit income statements, especially if you are a salaried employee. You need to submit the ITR files and paycheck documents to demonstrate a steady income flow.

    Similarly, a business person must submit tax reports, ITR files, and several other documents. Then, if the documents are good to go, you can seal a deal with reasonable rates.

     

    With so many options for online lenders offering varied interest rates, it is not possible to find the best rate without any prior guidance or homework. So follow these steps and ensure the rate matches your requirements.

    image