Personal loans are an excellent way to finance big-ticket expenses like a wedding, home renovation, or buying a vehicle. However, the interest rate charged on these loans can significantly increase the repayment amount.
With several banks and NBFCs offering personal loans, it can be challenging to find the best interest rate on personal loans. Therefore, we’ve compiled a list of some tips that will help you get the best rate of interest for personal loans.
1. Check Your Credit Score: Your credit score plays a significant role in determining the rate of interest you’re eligible for. If you have a good credit score (above 750), you’ll be eligible for a lower interest rate. On the other hand, if your credit score is low, you may be charged a higher interest rate.
2. Compare Interest Rates: Before applying for a personal loan, it’s essential to compare the interest rates offered by different lenders. Do some research and shortlist a few lenders that offer the best interest rates. This way, you’ll be able to select the loan that suits your requirements and also has a lower interest rate.
3. Negotiate with Lenders: Don’t hesitate to negotiate with the lender for a lower interest rate. Sometimes, banks may offer a lower interest rate if you have a stable income source or have a high credit score.
4. Opt for a Co-applicant: If you’re unable to get a low-interest rate on your personal loan, you can opt for a co-applicant. A co-applicant with a high credit score may help you get a lower interest rate.
5. Choose a Shorter Tenure: The longer the loan tenure, the higher the interest rate you’ll have to pay. Therefore, it’s always better to choose a shorter tenure as it can help you save money on interest charges.
In conclusion, getting the best interest rate on personal loans requires a bit of research and negotiation. Checking your credit score, comparing interest rates, negotiating with lenders, opting for a co-applicant, and choosing a shorter tenure are some of the ways to get a lower interest rate on your personal loan.
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