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Adopt these 4 strategies to obtain the lowest personal loan interest rates
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Features like collateral-free, quick disbursal, and zero restriction on the usage of proceeds are the reasons why personal loans tend to be a popular choice to meet monetary shortfalls instantly. However, as the loan is unsecured in nature, the personal loan rate generally is on the higher end than secured loan options. This disparity in rates is owing to different personal loan eligibility parameters factored in by a lender when assessing your application for a personal loan. Read on to know the four strategies to obtain the lowest personal loan rate.
1. Maintain an excellent credit score
A credit score is a three-digit number that indicates your credibility as a borrower. A credit score of 750 and above is looked upon as a good score. Lenders look at your score to evaluate your credit history, past repayment behaviour, and existing financial obligations. If your previously availed loans have been repaid in a timely way, the lender may consider you a low-risk applicant. This confidence in you allows the lender to offer you a low personal loan rate.
2. Compare various lenders
Every lender provides a personal loan at distinct rates. Thus, before you hit on any personal loan apply button for instant loan proceeds, you must ensure to compare the different personal loan interest rates. Doing this may allow you to find a loan offer at a low rate of interest as per your preference.
3. Watch out for seasonal offers
Make sure to look out for seasonal offers provided. A lot of times, festive and seasonal offers on interest rates and processing charges are offered for personal loans. Availing such an offer on a personal loan may allow you to considerably reduce your overall interest constituent.
4. Use an online personal loan EMI calculator
You can use Kotak’s online personal loan calculator to compute your Equated Monthly Instalment (EMI) and overall interest outgo. Here in this calculator, you must input three major parameters, namely – personal loan rate, required loan amount, and preferred repayment tenure. Once you input these three details, the EMI and the total interest outgo are computed instantly. As the online computations take just a few seconds to show the result, you can try out different permutations and combinations by changing any of the three added details. Once you get all the figures as per your preference, you can negotiate with the lender on all three parameters to avail the loan offer as per your suitability.
Ending note
Opting for a personal loan is one of the crucial decisions that you make in your life. Thus, extensive research and abiding by certain strategies are a must before you hit on the personal loan apply button. With the assistance of the above-mentioned points, you can narrow down on an affordable personal loan option.
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