Personal loans are easily available in today's day and age. Instant approval and collateral-free finances are key advantages of personal loan make this offering stand out. With simple personal loan eligibility criteria set by most lenders, you may qualify for it easily too. While you may have plenty of personal loan offers to choose from, the fact remains that a personal loan is unsecured, which makes lenders careful of the personal loan interest rate that is offered to you. This is why your credit score and history along with a duly filled personal loan application is so important for a fast and affordable sanction.
To keep your personal loan EMI affordable and enjoy a nominal personal loan interest rate, simply follow these 6 tips.
1) Work on your Credit Score
Your credit score vouches for your repayment capability and if it is above 750, a lender considers your application to be less of a risk. As you may not already have the ideal credit score to bag affordable and favourable loan deals, consider working on to improve your credit score by using a credit card prudently and repaying your dues on time and in full.
2) View your Pre-approved Offer
Reputed lenders view your credit report beforehand and offer pre-approved deals that are customised to complement your financial standing. When you check your pre-approved offer, you know the amount you are eligible for and can apply within that radius instead of applying for more than the lender assumes you can handle. Further, with a pre-approved offering, you can enjoy personal loan instant approval and competitive interest rates based on lender's knowledge of your details.
3) Compare Lenders and Negotiate
Despite the years of a financial relationship with your bank, it is essential you look beyond your bank's offering while applying for a personal loan. This way you can avail affordable offers from reputed lenders. For instance, availing a personal loan from Bajaj Finserv means you can benefit from a flexi loan facility. With this facility, you can borrow multiple times from your sanction according to your needs and pay interest on the used or withdrawn amount.
Further, you can choose to pay interest-only EMIs and repay the principal portion at the end of the tenor. Once you narrow down a lender whose benefits make repayment easy, consider negotiating with them on the personal loan interest rate by drawing their attention to your strengths like high income and job stability.
4) Consider Shorter Tenor
Longer tenors can make lenders wary of your repayment capabilities. Additionally, a shorter tenor means you spend less on interest expenses during repayment. Choosing a shorter tenor can help you both assure your lender and cut down on your expenses making repayment easier on your pocket. However, as your tenor will affect your EMIs, ensure your EMIs aren't too high compared to your monthly income. Having a high debt-to-income ratio can cause your lender to doubt your repayment abilities.
5) Disclose All your Income and Show Steady Work Profile
Showing all sources of income on your application helps your lender see you have enough money coming in to make your EMI payments on time. In addition to this, a reputable position in a renowned company can add more value to your application. So, use your employment in a large organisation to your advantage or plan your career steps wisely. You need to consider the above mentioned factors before applying for personal loan in the near future. In this regard, avoid jumping from job to job as it shows instability and reduces the guarantee of an assured income to pay your EMIs.
6) Apply with Co-applicant with Credit Score of 750 or More
A co-applicant can assure your lender of repayment as this means you are shouldering the responsibility with another borrower. A co-applicant with a score of 750 and above shows your lender that there is one more or at least one creditworthy individual that they can trust with repayment. As a lender then sees less of a risk in your application, they offer you loan at lower interest rates.
If you are looking for a personal loan, don't forget to consider offerings from NBFCs such as Bajaj Finserv. Here you can find substantial funding up to Rs.25 lakh at nominal interest rates. You can also apply online and enjoy an instant approval within 5 minutes and disbursal in 24 hours.