Personal loans are collateral-free offerings Therefore, lenders observe a certain degree of precaution when processing your application. Usually, personal loan interest rates are of two kinds. You can sign up for a fixed interest loan, wherein the interest rate at which your loan is sanctioned remains the same throughout the tenor. On the other hand, some lenders sanction floating interest personal loans. Here the interest rate for your sanction alters through the tenor based on RBI policies and other economic factors.
However, in case you are wondering how to get a personal loan with low interest rate regardless of whether you choose a fixed or floating rate, you must keep in mind a range of factors that are pivotal to get a low-interest sanction. Take a look at 4 top factors that affect your personal loan interest rate.
Your income and eligibility
Every lender has certain parameters for eligibility, based on which they decide whether or not you qualify for a personal loan. Your income plays a vital role in this list of terms. A hefty monthly income will help you bag a lower interest sanction on easy repayment terms. Similarly, your age also plays a prominent role and the younger you are, the quicker you will get a sanction. When you meet all the eligibility criteria of a lender, you are more likely to get a personal loan with a low interest rate. So, choose a lender who has simple criteria.
For instance, qualifying for the personal loan from Bajaj Finserv is easy. You need to be 23 to 55 years old when applying for the loan. Apart from this, based on your city of residence, you need to draw a minimum salary to be eligible for the loan. This means, if your salary is Rs.40,000 then you can easily qualify for a cost-effective Bajaj Finserv Personal Loan interest rate in Pune. This is because the minimum salary to qualify for this loan in Pune is Rs.35,000. You can use the personal loan eligibility calculator to confirm your eligibility for the loan in minutes and enjoy an affordable sanction.
Your credit score and credibility
Another key factor that can help you secure a competitive Bajaj Finance Personal Loan interest rate or the same from other lenders is your creditworthiness, which is determined by your credit score. With a score of 750 or more, your application is seen as reliable by lenders, as it means you have sufficient experience with credit and have repaid your debt in the past on time. Similarly, a default in your past is a red flag for lenders. It makes your application seem less reliable and riskier from the lender’s point of view and thus you may be offered a higher interest rate. So, maintain your credit standing and try to reduce your existing debt before you apply for a personal loan.
Your employer’s reputation and your job stability
The organization you work with and its market reputation plays an important role in the personal loan interest rate you are offered. Owing to the unsecured nature of the personal loan, lenders look for some security via your job profile and income. Thus, working with an MNC or a well-reputed government or private sector company will help you get a quicker and more affordable sanction. From the lender’s perspective, your employer’s stability means you get your paycheck on time, which means you are more likely to pay your EMIs on time. Similarly, your job stability also matters. If you have changed jobs too often in the recent past, a lender may view you as a risky applicant.
Your previous relationship with the lender
Having a savings account with the bank from where you intend to borrow a personal loan or being an existing FD customer with a financial institution that offers the loan will increase your chances to get a low interest personal loan sanction from the same institution. This is because lenders with whom you have a past relationship will consider your past record and work towards retaining you as a customer by offering you a personal loan at competitive interest rates.
Now that you know how to get a personal loan with low interest rate, be mindful of the above factors, and compare lenders to bag the best personal loan on low interest rate and other beneficial terms. Check your pre-approved offer from Bajaj Finserv and view a customised deal to enjoy expedited funding.
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