Source: Tax Guru
A kind of an unsecured loan, a personal loan is a handy financial tool that is easy to apply and in most cases, hassle-free to repay. However, since you don’t secure the loan with a collateral, you may find that the interest rate is on the higher side.
Here’s what you can do to get the best personal loan at low interest:
Build your credit score
Applying for an unsecured loan with a credit score of 750 or more is always beneficial. This is because a solid score makes you more financially credible in the lender’s eyes. However, if you have a low score because you haven’t made timely repayments on your existing loans or due to an error in your credit report or you have too many on-going loans, it’s best that you improve it before applying for a personal loan.
Compare multiple lenders
Choose your lender with care. Getting a personal loan at a low rate is important, but if the lender is not reliable and reputable, you may end up with a financial mess on your hands from shoddy paperwork, unreliable policies, hidden charges, and poor communication. To get it right, first select an instant personal loan. Then, compare its features and interest rates with others. You can also use a personal loan EMI calculator to tally the probable EMIs of the various loans you have shortlisted. That way, you can rule out the loans with EMIs that are beyond your budget.
Once you have a list of lenders with personal loans that fit your budget, you need to compare their features and additional benefits. Trusted lenders such as Bajaj Finserv give you access to a personal loan of up to `25 lakh at an affordable interest rate for a tenor of up to 60 months.
Here, you can also opt for a Flexi Personal Loan to reduce your EMIs by up to 45%. Moreover, you can apply for the loan online, get it approved in five minutes and get the money in your account within 24 hours.
With such benefits, you will never have to wait for funds when faced with urgent needs, nor will you have to compromise and take a loan that comes with a high interest rate, which will be difficult to repay.
Beware of hidden costs, processing fees
A personal loan with a low interest rate is ideal, but it only makes sense when the loan doesn’t carry a range of hidden charges. It pays to be cautious, as some lenders try to make up for a low interest rate by charging a hefty processing fee. Other fees like those for foreclosure, part pre-payment and cheque bounce may also be on the higher side. Even though these may be one-time charges or costs you may feel you may not incur, their deduction from your sanction will considerably impact your wallet.
Check how interest rate is calculated
If you find a lender offering you an interest rate that seems too good to be true, try to see the entire picture. Often, the promise of better terms maybe because the rate offered is a flat rate that doesn’t consider the repayment of principal and interest amount over the course of the loan tenor. Such a rate could mean a higher return on your loan overall. Read all the terms and conditions carefully and make an informed decision.
As you look for a low interest rate, make sure you weigh the pros and cons of each option to make the right choice. NBFCs offers customised pre-approved personal loans with flexible tenors and attractive interest rates. Simply log on to its website, check if you qualify for a pre-approved personal loan offer and avail the money you need in an instant.