Low interest personal loans have emerged as one of the best means for people to meet their immediate financial needs today. Right from booking a vacation to buying a high-end laptop, you can use a personal loan in any which way you want. However, it’s important that you take such loan at a competitive rate, else you might end up paying more than you what you wanted to. Let’s acquaint you with the top 6 ways to get a low interest personal loan in India.
Maintain a healthy credit score
You should keep your credit score in top shape by clearing all your dues and debts in time. A credit score of 750 or above can give you a good chance of availing a decent personal loan deal. Some useful ways of maintaining a good credit score are – keeping your credit utilisation ratio under 30%, avoiding multiple credit card applications, avoiding direct loans, checking your credit report on a regular basis and maintaining a good mix of both unsecured and secured loans. You should also regularly monitor your co-signed and/or guaranteed loans, to ensure that they are being repaid in time.
Bring stability to your employment history
It’s very important for the loan applicant to have a stable employment history in order to avail a good personal loan offer. Having an unstable employment record reflects badly on one’s repayment ability and can have a negative impact on the person’s eligibility for the loan. Resultantly, the lender might not offer good interest rates to such borrowers.
Keep a check on your repayment history
It’s very important to repay your debts in time to maintain a clean repayment history. You should try to clear your credit card bills in full and in time every month. EMI payments should also be made in a timely manner. All these efforts can help you get a good personal loan interest rate in the future. Please note, every lender looks at the borrower’s EMI repayment history before making a loan offer.
Understand the method used to calculate the interest rate
It might happen that despite availing a low interest personal loan, you end up paying more by the end of the loan’s tenure. This could be because of the interest rate calculation method used by the lender. Hence, it’s very important to understand this aspect to truly get a low interest personal loan.
A lender might offer you a personal loan at a reducing or a flat interest rate. In case of the latter, the interest payment is calculated on the entire loan amount, throughout the repayment tenure. However, in reducing interest rate model, the interest rate is calculated only on the outstanding principal amount. As a result, flat interest rate personal loans work out to be more expensive than the ones availed at reducing interest rate.
Get employed with a credible company
It’s a commonly known fact that people working with reputed blue-chip organisations, multinational companies etc. get excellent deals on personal loans from lenders. The reason behind this is that lenders perceive these employers capable of providing stable jobs, and hence the borrowers have a high likelihood of making a steady income and repaying the loan on time.
Compare lenders
If we look over the past decade, more and more people have been using reputed comparison platforms like GoSahi and others to compare personal loan offers from multiple lenders. This has proven to be immensely helpful in availing low interest personal loan deals.