Applying for a low-interest personal loan is the best way to meet your urgent financial needs. From paying your child’s education fees to going on a holiday to your dream destination with your loved one, you can fulfil all your needs with a personal loan. However, getting the loan at the best interest rate is paramount to ensure that you repay the debt easily. If you are a first-time loan applicant, the following tips will help you get the best interest rate on a personal loan.
Look for pre-approved offers
Nowadays, many lenders offer existing customers pre-approved personal loan offers. These offers often come with an affordable interest rate as the lenders determine the offer based on the borrower’s profile and past credit behaviour. If you have repaid your previous loans on time, you have a high chance of getting the best interest rate on a personal loan.
Meet or exceed the lender’s eligibility requirements
All financial institutions, including banks, and private lenders, have specific eligibility criteria, which you must meet to borrow the desired amount. The requirements are usually related to credit score, income, employment history, age, and credit profile. The lenders set the criteria to ensure that you have the financial capability to repay the amount on time.
So, if you meet the lender’s requirements or exceed them, you can get the loan approved faster and even get the credit at a lower interest rate than others.
Maintain a high credit score
The credit score is a three-digit number ranging from 300-900 that indicates your creditworthiness. Lenders consider your credit score as a critical factor in assessing your eligibility and prefer lending to those who have a high credit score of 750+.
So, if you have a high credit score, which is more than the lender’s minimum requirement, you can use it to your advantage and get an attractive personal loan offer. A higher credit score will help you get the loan at a lower interest rate.
Keep an eye out for seasonal offers
Generally, lenders inform customers about various special loan offers through SMS and e-mail. So, if you are looking to apply for a loan, keep an eye out for such offers. Such offers are often for a limited period and are one of the best ways to get a loan at a lower or discounted interest rate. Generally, lenders announce such offers during the festival season.
Compare, compare, compare
While it may sound like the most obvious thing to do, many people tend to borrow from the first lender they come across online or fall prey to various marketing gimmicks. So, before you submit your personal loan application, please do your research well about different lenders and compare their offers. This will go a long way in finding the best offer on a personal loan.
Also, when you compare the offers from different lenders, choose a lender that has simple documentation, quick disbursal, and gives you flexible repayment options.
Now that you know how to get personal loans at the best interest rate, do your due diligence and have a hassle-free borrowing experience.