Quick Ways to Get a Lower Personal Loan Interest Rate
Personal loans are unsecured credits. They do not require any collateral from the borrower while disbursing the funds. These loans are subjected to more risk which causes most financial institutions to charge higher personal loan rates of interest than on other forms of credit.
Fortunately, there are several ways how a borrower can reduce their interest burden for repaying a personal loan. Lenders usually consider an applicant’s credit history and repayment capability while sanctioning a personal loan. A prospective borrower can refer to the below-mentioned factors to avail such a credit at a lower interest rate.
Must Read: Get Online Personal Loans at Low Interest Rates in 2019
1.Good credit score — Credit score of 750 or higher shows a good repayment history, lowering the risk associated with lending. Financial institutions offer lower rates to applicants with a good credit score.
2.Low credit utilisation ratio — Low credit utilisation ratio and fixed obligation to income ratio (FOIR) shows that a borrower has fewer obligations to pay, increasing his or her repayment capability.
Similarly, individuals with a good employment history or with a high income can also benefit from a lower interest rate as they are more likely to meet the EMIs without defaulting.
3.Perform thorough market research — It is necessary for every borrower to conduct thorough market research before applying for a credit. There are several financial institutions that offer such credits to eligible applicants, and their personal loan interest rate usually varies between different lenders. An applicant can select a particular organisation that offers lower interest rates to save money during the repayment tenor.
Moreover, a borrower may also be offered lower personal loan interest rates if he or she applies for a smaller amount. It lowers the risk associated with lending, allowing financial institutions to offer a lower interest rate. Refer to leading lenders for the most beneficial loan terms and features. Make sure you apply while maintaining a high CIBIL score to enjoy the most attractive interest rates.
