Personal loans at low interest rates are the best way to tackle any urgent financial needs. From financing your child’s wedding to booking a holiday with your partner, you can bankroll all your needs with a personal loan. But, getting a loan at the most competitive rate is important. This will help you make repayments with ease. So, finding the best rate is very crucial.

How Can I Get the Lowest Interest Rate on Personal Loans?

Here are some of the ways to find the best possible interest rate on your loan.

  • Good Credit Score - Credit score reflects the creditworthiness based on how you have managed credit in the past. A score of over 700 or 750 makes you a good candidate for a personal loan. The higher you score, the better it is for you. Lenders decide repayment terms, loan amount and the interest rate based on your credit score. A higher score gives you an upper hand when it comes to negotiating terms.

  • Compare Between Lenders - Searching for the ideal personal loan requires some amount of research. Compare personal loans lenders in the market to find the loan with the best interest rate and features. This will take some time but will ensure that you make the right choice. Check your eligibility and apply for a personal loan online. You can get instant approval and disbursal of the personal loan amount to your account in as soon as 24 hours.

  • Check Out Seasonal Offers - Lenders generally notify customers about special offers via SMS and email. You must keep a watch for these offers to make your loan more affordable. These offers allow you to get limited-period discounts on the interest rate. These discounts are usually available when you apply online, during festive periods.

  • Use Professional Credentials - If you draw a high salary and work for a reputed public or private sector company, it makes you a stable candidate in the eye of the lender. So, use this to your advantage to negotiate a lower rate of interest. Your company’s good reputation can help you get a lower rate of interest since the lender is assured that you will have the financial means to make timely payments.

What are the Top Features and Benefits of Personal Loans?

  • Low-interest rates - Interest rates on this loan, as compared to the repayment of Credit Card or Credit Card Loan is significantly lower. This is especially true in case of larger amounts.

  • Variety of usage - Funds you receive via this loan can be used for a variety of purposes. Be it to fund an international trip, purchase a gadget or repay your friend, you can opt for a Personal Loan to satisfy any of these needs.

  • Consolidated debt - One of the best ways of utilising a Personal Loan is consolidating all existing debts. It is wiser to pay off smaller high-interest debts such as Student Loans or Credit Cards by opting for a lower interest loan.

  • Improve credit score - This is especially true in case you have similar types of existing credit. A Personal Loan can prove to be useful in improving your score by adding variety to the types of account you hold.

  • Create an emergency fund - You might find yourself living pay-cheque to pay-cheque, without any funds to save. In such a scenario, rather than waiting for an emergency to occur, it is wiser to get a loan to create an emergency fund. 

What are the Eligibility Criteria for Personal Loans?

Here are some of the general eligibility criteria that one will need to meet to apply for a personal loan:

  • Salaried persons working in government, private or MNC companies and self-employed professionals like Doctors, CA, CS, Architects

  • Eligible Age - 21 years to 60 years

  • Income - Rs. 25,000 per month for salaried; Rs. 5 Lakh gross annual receipts for professionals

  • Work Experience - 3 years and above

  • Minimum CIBIL Score – 650

  • Experience in Current Company - Varies from 1 month to 1 year


  1. What is the repayment tenure for personal loans?

Most banks/financial institutions allow borrowers to choose a loan tenure between 1 year and 5 years, based on their convenience

  1. How can I reduce the EMI payable for a personal loan?

You can reduce the EMI for a personal loan by improving/maintaining a credit score over 750. If you have a good relationship with the bank, you can negotiate for a better interest rate or a relationship discount.

  1. Is pre-payment allowed for personal loans?

Certain lenders may allow you to pre-pay the loan amount, based on their respective terms and conditions. You will likely be charged a pre-payment fee. Thus, if you intend to pre-pay your loan during the loan tenure, make sure to check if your lender allows this.

  1. Is it important to have a good credit score?

If you have a good credit score, the chances of you being offered the loan at a low-interest rate are quite high. Your credit score indicates your creditworthiness and your repayment ability. If you are looking to apply for a personal loan, it is advisable to maintain a credit score that is over 750. Individuals with a very low credit score may be denied a loan altogether, while those with a moderate credit score may be offered a personal loan, but at a high interest rate.

  1. Are there any advantages in applying for a personal loan online?

Yes, applying for a personal loan online saves you a considerable amount of time and effort, given that you can do it from the comfort of your house. Certain financial services websites also offer paperless approval, wherein you will not be required to submit any paperwork to the lender for your loan to be approved. The application process is also completely secure.

End Note

Personal loans are unsecured loans available for both salaried and self-employed professionals to help meet their general personal or private expenses that are urgent and immediate. Unsecured loans are loans without any security that can be availed quickly. The rate of interest on personal loans is higher than that on secured loans. There are multiple personal loan providers in India which offer cheap and quick loans.