The personal loan interest rates offered by a financial institution are mainly determined by the factors like income, employment status, age, credit score, and location. Online, you can easily check and compare the latest interest rates offered from various private and public sector banks, NBFCs, Small Finance Banks, and Micro Finance Institutions due to advancements in technology and the emergence of FinTech companies.
Be it is private bank loan interest rate or public sector banks; the lenders are fixing the interest rates primarily based on their cost of funds and after doing the credit risk evaluation of their loan applicants. Here are some of the key factors that can influence your loan interest rates:
Credit score
Many lenders take into consideration the credit scores of their loan applicants before approving instant cash loans online. Those having higher credit scores are offered personal loans at lower interest rates than others. Always try to maintain credit scores of 750 and above. Good financial habits like repaying your credit card bills and EMIs by their due dates, avoiding multiple loans or credit card applications within a short period. Try to keep credit utilization max to 30 percent always.
Employer:
The lender apart from credit score also take into consideration the employer’s profile where the applicant is currently working. If you are salaried employee and is associated with a blue-chip company, there are chances that you will be offered the lowest loan interest rates in India as compared to the self-employed ones. Among salaried applicants, government and PSUs are usually offered lowest loan interest rates due to their higher job security and income certainty. Then, comes the personal loan applicants employed with MNCs and reputed private sector organizations as such companies.
Income: A higher income indicates a higher capacity to repay the loan. This leads to lower credit risk for the lender. Thus, many lenders offer lower personal loan interest rates to those having a higher income.
Existing lending or banking relationship with the lender:
Many lenders offer instant cash loans online at concessional interest rates to applicants having existing banking or lending with the lender. Hence, those planning to lowest loan interest rates in India should always contact the banks/NBFCs with whom they already have an existing relationship.
Tips to Avail Personal Loan at Low-Interest Rate
Below stated are the important points to consider getting personal loan at lower interest rates:
Build and maintain your credit score of 750 or above.
Check for pre-approved offers from banks, NBFCs, Small Finance Banks (SFBs) & Micro Finance Institutions (MFIs).
Enquire with banks/NBFCs with whom you already have the deposit and/or loan accounts
Always track the interest rate concessions offered by lenders during festive seasons
Visit online financial marketplaces to check and compare personal loan offers from various lender.
Low-interest rates are the best way to tackle your personal loan. From financing your child education to coping up with immediate financial and medical emergencies, you can bank roll your needs with online personal loan. Interest rate starts from 10.25%.