Personal loan is that type of loan which requires no collateral or security. It is used to meet any urgent financial need or emergency. people can avail this loan to meet the expenses of a wedding, medical treatment, debt consolidation, home renovations, education for education and so on.
Personal loans can be availed by any bank or NBFC to meet any unplanned and immediate need. Personal Loan is available to salaried as well as non-salaried individuals and has captured very large market of loan segment.
For availing personal loan, one requires to fulfil certain criteria as specified by the lender i.e. bank or NBFC. Lender checks some factors such as your income, age, credit score, existing debt to income ratio, etc. to decide the loan amount and the interest rate thereon.
Personal loans carry a higher rate of interest compared to other forms of loans such as home loans or gold loan. Personal Loan interest ranges from 11% to 25%. However, with some plus points in your hand such as regular income, good credit history, good relationship with the lender, you can negotiate on the interest rate with the lender.
Given below are 5 smart ways to get cheap personal loan:
Suggested reading Difference between Loan against Property and Personal Loan
You need to check your CIBIL score first. If it is below 750 then will not be considered good by the lenders and they will offer you a personal loan on higher interest rate.
You must take some serious and effective steps to improve your CIBIL score above 750 mark. If you are able to do so then you will be in a position to get the personal loan at lower rates which will save your cost of interest payment.
If you are an owner of a house then you will get personal loan at lower interest. It has been seen that the interest rates on the personal loan are lesser when you own house than that if you stay in a rented house.
Also read Can a Student Apply for a Personal Loan?
If you are working for a reputed company, you will be offered lower interest rate on personal loan. Banks and NBFCs have a list of reputed companies and if your company (which you are working for) falls into that list, you will get loan at cheaper rate.
If you are earning well and have a regular income, you will get personal loan at cheaper rate. If you draw a salary in the range of Rs 30000 to Rs 50000 then you will be offered more rate than the rate which is offered if you are earning more than Rs 50000.
If you apply for personal loan from the bank where you are having your own bank account then you might have developed healthy relations with the banker. In that case, you get an opportunity to negotiate with the banker on interest rate of personal loan. Your banker may also consider lowering the interest because he knows you personally for many years and is well aware of your credit worthiness in due course of time.
As Personal Loan is a loan offered at comparatively higher interest rate which varies from customer to customer hence it is very crucial for you to get a good bargain on your personal loan.
In above article, we have mentioned some of the important ways which will help you getting a better deal of personal loan.
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