An unsecured loan, a personal loan is easy to apply for and offers hassle-free repayment options, depending upon the lender. Naturally, you’re looking at competitive rates of interest when you apply for a personal loan. Here are some techniques you can use to get the least interest rates on your personal loan.
Improve your credit
Credit score and credit history are the main factors that determine the rate of interest a lender offers you. Maintaining a high credit score and a positive credit history is the key to bagging a low-interest rate. If your credit score is keeping you from securing the best personal loan interest rates, it’s time you started working on it. Here are a few things you can do to improve your credit score:
• Pay bills on time
• Pay off debts
• Manage your balances
• Dispute any inaccuracies in your credit report
• Make timely credit card payments
When a lender evaluates your profile for a loan, they calculate the debt-to-income ratio and analyse this. This ratio is calculated by adding monthly debt obligations and dividing it by your monthly income. You are considered a risky candidate for a loan if this ratio is high.
Remember that the higher your credit score is, the lower your personal loan interest rate will be.
Choose a short loan tenure
The faster you make a personal loan repayment, the lower the risk you pose to a lender. You’ll find most lenders offering better interest rates on loans with shorter tenures. If possible, choose short loan terms (of course, depending on your needs and repayment capacity) to get a competitive interest rate.
Add a co-applicant
Have a low credit score? Don’t worry, you can still get a low-interest rate by adding a co-applicant with a high score. When lenders process loans, they consider both the applicants’ credit scores for evaluation. Naturally, having a co-applicant with a better score on board will increase your chances of securing a competitive interest rate.
Choose the right lender
Ultimately, the interest rate offered comes down to your lender. Conduct thorough research on different loan providers and the kind of loans you can avail. The interest rate will depend on the tenure and amount of the loan, apart from a lender’s policies and evaluation criteria.
At Tata Capital, you get personal loans from interest rates starting at just 10.99%! All you need to do is to fill out an application online and you receive a personalised principal eligibility and interest quote. Waste no time! Apply for a personal loan at Tata Capital and benefit from the best interest rates in the market!