Personal loans are the most sought after loan product in the lending market today. They are highly flexible in their approach and allow the borrowers to use the money as per their will. The lender doesn’t hold any jurisdiction in how the loan amount will be used and that is why it is attracting more and more borrowers. They can use the loan amount to finance their wedding, education, travel, home renovation projects, take care of medical emergencies and also for business needs. Further being unsecured in nature, one finds it convenient and safe to apply. But the lack of collateral also results in it being offered at a higher rate of interest in comparison to other secured loan products. The total cost of the loan is determined by the interest rate and loan tenure. Both are directly proportional and an increase in either result in an increase in the total cost of the loan. It thus becomes important for the borrower to grab a deal wherein the personal loan interest rate is low.
The personal loan market is beaming with loans being offered with a competitive rate of interests. Lenders are happily offering attractive deals so that more and more people can get benefits from the same. An unsecured personal loan is also being offered at a low rate of interest and which is why even business owners in need of funds are availing it. However even with so much competition, only a few lenders match your needs and requirements better than others. It is thus advisable to compare different lenders before finally zeroing on the one. This ensures you grab the perfect deal and make the most informed decision.
Personal loan interest rate is one of the main deciding factors when it comes to availing the loan. It not only determines the total amount you will be paying as an interest to the lender but also significantly determines the cost of the personal loan. Higher interest rate means that you will be paying more as an interest to the lender. This parameter is thus required to be considered carefully. Several factors affect the rate of interest and thus it is important to get hold of them before applying for the loan.
- Income: lenders are mainly concerned with the repayment of their loan. And therefore before approving, they thoroughly check the financial credentials of the applicant. The higher income of the applicant results in quick loan approval and sometimes better interest rate deal from the lender as it assures them of repayment and lowers their risk.
- Credit score: Credit score or CIBIL score determines your credibility as it chalks out the transactions of your previous debts and also highlights the defaults if any. Lenders offer better interest rate deal to applicants with a higher credit score in comparison to those with a poor credit score.
- Employment: Lenders are more than willing to offer their personal loan products to salaried individuals rather than self-employed professionals and non-professionals. Salaried individuals with good pay scale are sure to grab better personal loan interest rate deals than business owners.
- Employer: Lenders also seek the employer of the applicant. A well-established company, MNC and government sector are more trusted than any small and unknown firm. The status of employer signifies the job stability of the employee. If the applicant is associated with a bigger company, chances of him grabbing a better interest rate deal are high.
- Relationship with the lender: Good relationship and long association with the lender may result in better interest rates on a personal loan.
With the façade of banking changing with the latest technology, it is time to switch from the offline platform to the online platform for applying for a personal loan online. Applying for a personal loan online is easier, faster, convenient and hassle-free. One can apply for the loan through the digital platforms of the chosen lender or through comparative platforms of Fintechs like that of LoansJagat. There is no need of physically visiting the bank ‘n’ number of times as the whole process of loan application to document submission, to check the status of processing, verification and approval all can be done within seconds using a click of a button. Online platforms allow you to apply for the loan even at midnight. Doesn’t it sound convenient? Moreover, digital platforms are fully secure and transparent in their approach and conduct. So, change the way you apply for a personal loan and grab the most competitive interest rate deal online.