Personal loans can be very handy tools, and you should know how to get the best personal loan interest rates possible. Since these loans can be used for virtually any expense, it is likely that you may decide to avail such a loan.
For such occurrences, getting the best deal is key as it can save you a lot of money and make the experience a lot more enjoyable. Read on to know how you can optimise your application and your profile to get the best personal loan interest rates.
Ensure That You Meet The Requirements
Before you apply, check the lender-specific loan criteria. These will be mentioned on the loan page and will specify the minimum requirements. Here, the important terms to note are your age, income, citizenship, and credit score.
Each lender will have different terms, so it is important that you check before applying. In some cases, you may find city-specific terms. This is quite common with income-related requirements.
For instance, the minimum income needed for a personal loan in a metropolitan city is often higher than the income needed for the same loan in a tier-3 city. Failing to meet this requirement can be a problem.
However, if you comfortably meet the income requirement, your chances of getting the best personal loan rates increases drastically. In fact, if you earn a high income, you can easily qualify for some of the lowest rates possible.
Another important criterion is your credit score. Lenders rely on this attribute to gauge your creditworthiness and often require you to have a minimum score of 750. If you have such a score, you can get a low interest rate personal loan with ease.
Minimise The Instances Of Default On Your Profile
Defaulting on your credit payments can occur for many reasons. Whether due to negligence or circumstance, these reflect poorly on your profile. These are also red flags for lenders, and they may offer a high rate to offset the risk.
So, if you want the best personal loan interest rates, ensure that your profile has no history of defaults for at least 12 months. This may assure lenders that you have better control of your finances, and you may get a better rate.
Disclose All Your Income Information To The Lender
To get the best personal loan interest rates, you must position yourself as a low-risk borrower. An easy way to do this is to prove that you have a strong financial base to handle payments. Simply relying on your income may not be enough.
In such instances, it helps to disclose additional sources of income to the lender. This includes:
- Profit income
- Rental income
- Capital gains from assets
- Any other sources of passive income
If you earn a high income from your job or your business, this may not be required to get the best personal loan interest rates. But in most other cases, it helps to prove that you can handle the payments without any risk of default.
Have A Stable Job At A Reputable Organisation
When determining the terms of your loan, lenders assess all the important factors. As a salaried applicant, this includes your job and your employer. To get the best rates, you must have a stable job and at a reputable organisation.
This is because it showcases stability of income. Lenders need assurance that you can repay on time, and so they consider all the variables involved. Similarly, some lenders may even check your job tenor too.
If you have recently switched jobs, it may be harder to get the best rates for your loan. However, if you have maintained your job for several years at your organisation, getting a low rate should be easy.
Avail A Pre-approved Loan Offer
The easiest way to get your personal loan at a low rate is to scout for a lender that has extended a pre-approved offer. These are personalised terms and are arguably the best rates you may get.
Pre-approved offers are also easy to avail as you usually only get them if you are an existing customer. However, some lenders may still offer special deals and it would be wise to consider them.
The interest rate on personal loan offered to you depends on these factors, and you should optimise accordingly. Since it is an unsecured loan, lenders rely heavily on the assessment of your financial standing.
Here, having a strong profile or one that does not pose much of a risk to lend to can make all the difference. Above all, pick a lender that offers a personalised personal loan interest rate. This way, you get the best deal and can further tailor the loan for affordability.