You can get a personal loan to curb your financial requirements for various reasons such as medical treatment, home renovation, wedding expenses, growing your business, etc. Since it is an unsecured loan, you can get a loan without pledging any asset as security. As a result, it makes it a convenient source of funds, especially when there is a sudden requirement.
Though personal loans are beneficial in many ways, you must consider the interest rates before getting one. You have calculated the EMI using EMI calculators available on various websites to get a clear picture of your expenses.
Moreover, lenders check your credit history to assess your credit behavior. Before offering you a personal loan at low-interest rates, they consider various factors.
In this article, we will learn the top 5 tips and tricks to get a personal loan at the best interest rates.
Top 5 Smart Tips To Get The Best Personal Loan Interest Rates
Qualify the Required Eligibility Criteria
The eligibility criteria differ among different banks. It mainly includes minimum age, nationality, monthly income, credit score, etc. You have to make sure that you meet all the required criteria to get instant loan approval. If you qualify the requirements, you have a higher chance of getting a loan at the best interest rates.
Compare the Interest Rates of Various Banks.
The interest rates vary depending on the banks and lending institutions. Before applying for a loan, do a complete comparative analysis of the interest rates offered by various lenders. By doing so, you will be able to choose the best rates which suit your financial needs.
Show That you Have a Stable Income.
Since personal loans are unsecured, lenders have a high risk of lending you the funds. As a result, they expect you to have a stable income to ensure that you can repay the loan without defaulting. You have to submit your proof of income and your employment certificate to show that you have a stable source of income to repay your loan. Doing so will increase your credibility as a borrower and help you get a loan at lower interest rates.
Maintain a High Credit Score
A credit score plays a significant role in determining your credit behavior. This score is generated based on your payment history, credit mix, credit utilization ratio, new credits, etc. You have to maintain a score above 750 to get the best interest rates, indicating your ability to repay the loan. You can also negotiate with your lender to reduce your interest rates when you have a good score. To improve your credit score, you must make payments on time, clear all your past debts, and maintain your credit utilization ratio of less than 30% of your income.
Keep an Eye on Seasonal Deals and Offers.
Lenders offer seasonal deals and pre-approved loans to their existing customers. They give offers based on your credit history and repayment history. If you are an existing customer, you can also check for these offers and get the best interest rates on your loans.
Following the tips mentioned above will help increase your credibility as a borrower. However, you must maintain a good credit score and stable income to get the best personal loan interest rates.