When it comes to financial facilities, personal loans are among the best solutions. It is because you can apply for it without any collateral. The personal loan online facility is unsecured, and that is why it carries higher interest charges.
Anyone with a robust CIBIL score, repayment and employment record may get the approval for a low personal loan interest.
But, having said that, what is the best personal loan interest rate? Let’s explore more in this post!
What is considered a good personal loan interest rate?
If your credit score is 750 or more, well employed and has paid your EMIs and other bills on time, you can enjoy the best personal loan interest rate.
To know about the personal loan interest rate matching your needs, you can do that online.
You can land on the website of the lender applying for the loan, and access the loan EMI calculator.
Not only the EMI calculator showcases the exact loan EMI, but even total payable interest and the entire loan cost.
This way, you may determine if the total interest amount suits your needs and the repayment capacity the best.
Based on your needs and the budget, you may increase or decrease the loan amount. It will also increase or lower the payable interest charges.
What factors affect personal loan interest rates?
Your credit score
Your credit score is one of the key factors affecting your personal loan interest rate. If your credit score is higher, you may get the loan approval faster, and at a lower rate. A credit score of 750 or more is what is considered best by lenders. It is to sanction your loan application at a reduced rate. Thus, you should ensure having a robust credit score while applying for a personal loan online facility.
Along with your CIBIL score, your income is another essential factor that may gauge the applicable rate of interest on personal loans. Applicants earning a higher income per month may be more likely to repay loan EMIs than those earning less. Borrowers earning a higher income may instill confidence in lenders of timely repayments. If your take-home salary is higher, lenders may reward you with a low interest personal loan.
Your debt to income ratio
If you are earning a higher income, and a large part is going towards repayments, you may have a higher debt to income ratio. In this case, your ongoing debts may affect the interest rate on any other loan. Hence, when you wish to avail of the personal loan at a lower rate, you should ensure that your income supports future EMIs. This way, your prospective lender may be convinced that you may repay the loan amount.
Your relationship with the lender
If you have been a loyal customer of a particular lender, such loan providers may charge a lower rate of interest. Since your lender is already aware of your financial profile, it may have an idea about your repayment routine. Hence, it may let you enjoy a low interest personal loan. This way, you may save big on interest charges and pay reduced EMIs.
Bajaj Finserv offers pre-approved offers on personal loans, home loans, business loans and more. It is to simplify loan processing and make it less time-consuming.
You can check out your pre-approved loan offers today after sharing your basic details such as your name and mobile number.