The lower the interest rates of personal loans, the better it is to take care of financial needs. Personal loans have certainly helped many people for decades now to fulfil unexpected expenses. It could be medical emergencies, unforeseen debt consolidation requirements, and managing an urgent need for money. Though, in modern times, the importance and the role of personal loans have broadened by miles.
Nowadays, people do personal lending through HDFC personal loan and even from other lending institutions available for various purposes like higher education expenses, holidays, weddings, and many unplanned expenses. And this change has happened because of the drop in the interest rates of personal loans and the ease of having one.
This post aims to help people know how they can get the best interest rates for personal loans to fulfil their monetary needs.
- Use Professional Credentials
You can always make use of your professional credentials to negotiate the best interest rate with the lender. For example, if you are working in a reputed or MNC organization and getting paid a high salary, you can easily get a personal loan at the best low rate of interest. This is because most lending institutions have a good rapport with the fortunes companies, which helps you get the best deals for personal loans.
- Always Apply With a Known Lender
The best thing about applying for a personal loan with a known lender or reliable financial institution is that you can leverage the power of negotiation. Known lenders always deliver the best interest rates and service terms to the existing customers. Another great thing is that you can also have special discounts on the interest rates only offered to the existing customers by the lenders.
- Employment History
Residential and job stability and having a decent FOIR (Fixed Obligation to Income Ratio) help build a good credit score that also impacts the interest rates. In some cases, before you get the sanction letter for the loan, the financial or lending institution asks you to show the employment history at least of the last two years. You may also ask to provide details of the previous year with your present employer.
It is also seen that loan lending institutions favour all those loan seekers employed with the state or central government, quasi-government or PSUs. This certainly helps in getting better and low-interest rates. Above all, reputation and financial stability play an important role in deciding the best interest rates for a personal loan.
- Grab Seasonal Offers
There are times in a year when banks and financial institutions offer an attractive rate of interest to increase their customer base. This is also done to match the competitive corporate rates offered by other banks. You may get several promotional offers through SMS, and availing of those offers will help you get the best deals on interest rates for the personal loan.
- Always Try to Maintain a Good Credit Score
The credit score is very effective in showing the creditworthiness of how you have managed the credit in the past. If you have an existing score between 700-750, you are a good candidate for a personal loan. The higher your score, the better it is for you to get the best deals on personal loans.
The amount for the loan, repayment terms and, most importantly, the interest rate will be determined based on the credit score. Having a higher credit score also gives you an upper hand when negotiating the terms.
Following the pointers discussed in the post will certainly help you have the best interest rates for personal loans and help you have a better living. Please feel free to share your insights regarding the post or your queries below in the comment section.
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