You can get a personal loan with a lower interest rate if you follow the following tips mentioned below.
1. Good credit score:
If you have a good credit score that is above 750, the interest rates that you will receive for your personal loan will be lower. A credit score is a three-digit number that shows your creditworthiness. Banks use your credit score to assess your reliability. So, if you have a poor credit score, the banks will consider you to be a risky customer and will increase the interest rate for the loan.
2. Long credit history:
If you have a long credit history that is positive, then the interest rates that you will receive from your lender for your personal loan will be much lower. This is because your lender will view your past transactions with your past credit products to check your creditworthiness. If you have a good and long credit history, the banks will consider you to be reliable and will lend to you at lower interest rates. If you have a no-so-lengthy credit history, the interest rates will be higher as you will be viewed as a risky customer.
3. Loan amount:
If you take a large loan amount, the interest rate that is charged on it will be lower than a small loan amount. Although, with a high loan amount, the tenure will be longer, which essentially means that you would be paying more cumulative interest when you repay the loan in full. Hence, you should always take the loan amount you would be able to repay without compromising your other expenses.
4. Stable employment:
If you are working with a reputed company that is listed with the bank you are borrowing from, then the interest rate that is charged on your personal loan will be much lower. This is because the bank will consider you to be capable of repaying your loan amount without defaulting on payments due to steady and regular income. This is beneficial for salaried individuals who have a good income that is monthly.
5. Good relationship with lender:
If you have a good relationship with the lender you are borrowing from, then the interest rates can be negotiated and you can get a lower interest rate. This is why it is advisable to borrow from a bank that you are already an existing customer of. This can help you lower the interest rates on your personal loan. Most lenders aim to please their customers and so, they can lower the interest rates if you have a good and long relationship with them.
To apply for a low interest personal loan, click here.