The share of personal loan among the total bank credit surged by 24% in March 2020, compared to only 16.6% which was 5 years ago. These statistics also indicate the growing demand for consumption loans in the country.
Moreover, just like any other type of unsecured credit, a personal loan also comes with an affordable interest rate and payable EMIs. Individuals also often look for a lowest personal loan interest rate in India so that they can reduce the burden of the interest payment.
Moreover, both existing and new borrowers can lower their interest liability following some useful tips.
- Improve credit score
Typically, lenders check the credit score of the loan applicant to determine his/her creditworthiness. For instance, to be eligible for a personal loan, individuals have to maintain a good CIBIL score (750 or higher).
Moreover, it will also help borrowers to get the best low interest personal loan.
- Repay regularly
Another effective way to meet the eligibility for a low interest personal loan is to repay the existing loans on time without any miss. In this regard, borrowers also can follow some useful tips to save on EMIs by consolidating existing debts.
- Compare with different lenders
Almost all lenders offer a personal loan in India, and selecting a particular organisation can get challenging. However, selected NBFCs like Bajaj Finserv also allow borrowers to reduce their interest payment and EMI component through Flexi personal loan. Moreover, with proper personal loan eligibility, applicants can negotiate for a lower interest rate.
Bajaj Finserv also provides pre-approved offers that make the loan application process hassle-free and quick. Besides personal loans, such offers are also available for various other unsecured loans, like business loans, credit cards, etc. All you have to do is enter your name and contact number to check your pre-approved loan offer.
- Check interest calculation method
Lenders offer personal loans either at a flat interest rate or reducing rate. In the flat interest rate, the interest is charged on the full loan amount, and it remains the same throughout the tenure.
On the other hand, a reducing rate is charged on the outstanding principal amount, and the EMI reduces as repayments are made. Therefore, if individuals want to avail a low interest personal loan, they can consider settling for a reducing interest rate.
Moreover, to calculate the EMI, individuals also can use an online personal loan EMI calculator that indicates the number of instalments, EMI amount and other major components.
- Mention all sources of income
Low monthly income is one of the factors that affect personal loan interest rate. Therefore, if an applicant wants to avail a low interest personal loan, he or she will have to mention their all income sources along with the salary. It will help lenders determine the repayment capacity of the applicant.
- Opt for a balance transfer
Along with new borrowers, the existing ones also can reduce the interest rate by opting for a balance transfer. This facility comes handy when the interest on outstanding loan amount is higher than the current market rate.
Borrowers can choose a lender who agrees to charge lower interest on the outstanding amount and also offer better terms of service. However, before opting for this facility, individuals need to consider associated charges like processing fee, statement charges, etc. as well.
Therefore, following these simple tips, individuals can make themselves eligible for the low interest personal loan. It will help them to service the loan more efficiently and without compromising their other liabilities.