Credit Score

When determining interest rates, many lenders now use the borrowers’ credit ratings. Personal loans are offered at cheaper interest rates to those with better credit scores. As a result, you should aim for credit ratings of 750 or above.

Having higher credit scores requires good financial habits such as paying credit card bills and EMIs on time, avoiding several loans or credit card applications in a short period of time, and maintaining a low credit use ratio.

Income/Salary

Higher income signifies a greater ability to repay the debt. As a result, the lender's credit risk is reduced. As a result, many lenders offer reduced personal loan interest rates to higher-income borrowers. However, if you are already repaying multiple EMIs through your income, then the interest rate imposed may be higher.

Repayment History

Those with good repayment history are known to present less risk to lenders hence, can avail loans with lower interest rates

Work

When determining interest rates for personal loans, many lenders take into account the applicant's employment profile. Salaried people typically pay lower interest rates than self-employed people, owing to the former's stronger income security.

Because of their superior employment stability and income certainty, the government and PSUs typically offer lower borrowing rates to salaried applicants. Personal loan applicants who work for MNCs and reputable private sector businesses are thought to have a better chance of surviving economic downturns than other private sector organizations.

Existing Relationship with the Moneylender

Many lenders provide personal loans with low-interest rates to applicants who already have a banking or lending relationship with them. Those seeking personal loans should always inquire about personal loan offers from banks/NBFCs with which they already have a lending or banking connection.

1. Reducing or Variable Interest Rate

Reducing or variable interest rate is a type of personal loan interest rate. A personal loan's variable interest rate fluctuates on a regular basis and is tied to the Reserve Bank of India's repo rate adjustments. The adjustable interest rate is also known as a lowering or variable interest rate.

2. Fixed or Flat Interest Rate

The interest rate on the loan amount is fixed under this method and remains constant throughout the loan term. The lender determines it based on assumptions about the average discount rate over the loan term.

1. Keep Your Credit Score in Good Shape:

Your credit score reflects your creditworthiness based on previous credit management. A credit score of 700 or 750 qualifies you for a personal loan. As a general rule, the greater your score, the better. Lenders use your credit score to determine payback terms, loan amount, and interest rate. When it comes to negotiating terms, a higher score provides you with an advantage.

2. Shop Around for the Greatest Deal from Different Lenders:

In your search for easy personal loans, a little research will go a long way. Compare personal loans from several lenders to find the best interest rate and features. This will take time, but it will ensure that you make the best decision possible. Choose a personal loan from Bajaj Finserv, one of the country's largest non-banking financial companies. Check your eligibility for a personal loan and apply online. Instant approval and disbursement of the personal loan amount to your account is possible in as little as 24 hours.

3. Keep an Eye Out for Seasonal Deals:

Customers are notified of special deals via SMS and email by lenders. Keep an eye out for these deals if you want to make your loan cheaper. These deals allow you to enjoy interest rate savings for a short time. During the holiday season, these savings are frequently available when you apply online.

4. Try Negotiating with Your Moneylender:

If you earn a good wage and work for a reputable public or private company, the lender sees you as a reliable applicant. So, take advantage of this to get a better interest rate. Because the lender is certain that you will have the financial resources to make timely payments, your company's outstanding reputation can help you acquire a reduced interest rate.

Flat Interest Rate

Reducing Balance Interest Rate