Repayment of loans is a long-term responsibility, and definitely adds to the tension that one might have regarding financial management. It is one more aspect to worry about while planning the future, with the EMIs looming large before one can plan about anything else. It is hence more of a necessity to devote ample time in researching the best personal loan interest rates and it would be great if one knows beforehand where to find them, in case the need of a loan arises.
How does a First Time Loan Applicant Start Looking for Best Personal Loan Interests?
When researching interest rates on personal loans, the obvious starting point becomes the bank one has always been associated with. It does help if the bank has known you for a long term period and you have been fortunate enough to get approved for your business loans from the institution. You good repayment behavior might also make you a perfect candidate for them to loan out money to; as they are sure they are getting their money back. However, you should pause to consider that till that point of time, you might have opted for a business loan or a home loan, the circumstances of which, along with the interest rates are completely different from getting a personal loan. There are a different set of guidelines and criteria to be met for getting approved for a personal loan and this time, the terms and conditions might not be to your best advantage. This is when you start looking at other banks and credit unions.
Bajaj Finserv has been instrumental in providing personal loans to hundreds of users at very competitive interest rates. Not only do they have a reliable personal loan interest rate calculator, but every step of the procedure of applying for a personal loan is properly explained to the potential debtor and a picture of what it might entail, so that he/she can make an informed decision about opting for a loan from that financial institution. Personal loan interest rates in India have decreased somewhat after demonetization in an effort to boost the economy and to encourage people to apply for loans for personal and professional improvement. Bajaj Finserv has been a leader in this regard, offering attractive personal loan options to customers.
Which factors can affect the Interest Rates of a particular Personal Loan?
The current personal loan interest rates in India start from about 11.49% and go up if the tenor increases or there are risks that might show up in the credit history. In India, although many users are now aware about the procedure of applying for a loan, there is still some ignorance to be noticed when it comes to building a credit score that seems attractive and reliable to a potential creditor. The CIBIL score is now fast gaining prominence and once the user has it form a certified credit bureau, he/she should start short listing credit unions and banks that are ready to work with that score.
One might get the personal loan lowest interest rates if they are willing to provide collateral as well. This is almost like putting a house on mortgage- if the home loan is not paid back on time, the house becomes the property of the bank. In the same way, a collateral would stand in and cover the risks in the eventuality of a non- repayment and since the creditors already have an assurance, they are often willing to bring down the interest rates. In the long run, one ends up saving quite a bit as the loan gets repaid with reduced interest and on the successful repayment, the collateral stays intact if the loan is repaid successfully. Naturally, such an arrangement is feasible to someone who has a secure source of income and in this case, almost any bank or credit union of repute will be willing to work with the person, without even having to look elsewhere very much.
Some patience, some knowhow of how the financial market works and an in depth knowledge about one’s own financial standing is all that one would need to get the best personal loan interest rates. Usually personal loan rates vary between 12-20% and even more. You will have to compare multiple loan providers and get the best rates along with other benefits. A good CIBIL score coupled with a healthy monthly income and adherence to all other guidelines should ensure that you get a competitive interest rate for your personal loan without having to put up collateral or take such extreme measures.