Personal Finance: Here’s How You Can Get Better Interest Rate on Personal Loan

A personal loan is a mode of unsecured finance that helps you meet a range of needs. Thanks to digitisation and evolution of alternate lenders, availing personal loan is quite easy today. However, as the loan doesn’t require any collateral the rate of interest is on the higher side. This article tells you ways through which you can avail a competitive rate of interest on this loan.

credit score is a three-digit score that tells lenders about your creditworthiness. Ranging between 300-900, the score tells the likelihood of loan repayment. Maintaining a credit score close to 900 boosts your chances of availing the loan at a better interest rate.To maintain a good credit score, pay your bills on time and avoid swiping your credit card often. When you do so, the lender perceives you as someone who likes to live on borrowed money. Also, if you are serving any EMIs, make sure not to default on them as any default can sully your credit score. Prudent money management can help you build and maintain a good score.

This is one of common mistakes made by potential borrowers. Applying to multiple lenders at the same time paints you as a credit hungry borrower, and rejection by a lender reflects on your credit history and score.
Therefore, you must limit your applications and in case of a rejection, find out the reason behind it. Don’t make the mistake of applying immediately once your application is rejected. Have a gap of at least a couple of months before making the next application.

The Indian financial landscape has undergone a sea change with the evolution of alternate lenders such as non-banking financial companies and fintech start-ups. You can look forward to these lenders for procuring loans at an attractive rate of interest.Most of these lenders have a simple application and quick disbursal process. All you need to do is to fill up the application form and provide basic documents related to your identity, income, and residence. The loan amount is instantly credited to your account.

To attract borrowers, lenders often come out with seasonal offers where they not only offer loans at a competitive rate of interest but also waive off processing fees and other charges.
Watch out for these offers for an attractive deal. You can subscribe to newsletters from lenders to know about such offers. In conclusion Also, compare different offerings before availing a loan and if possible, apply with a known lender. This is because lenders offer attractive rate of interest to customers they know. Follow these steps to seal an attractive deal.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.