Every lending institution considers your credit score before offering you loan terms
Personal loans popularity has increased exponentially over the last decade. There was double-digit growth in their share in outstanding bank credit – 25.9% in March 2021. Overall personal loan segment has increased by Rs 73,000 crore within two quarters, ending September 2021.
The reason behind personal loans being so popular is that they help you fulfil your financial needs without compromising on your valuable assets. Most loan seekers prefer a personal loan to meet a variety of financial requirements as these loans do not restrict borrowers for the end-use of credit. These loans are primarily supported by the borrower’s creditworthiness – the better the credit history, the lower the interest rates. If you are eligible, you can get a Fullerton India personal loan at an interest rate of as low as 11.99%.
How to Get Lowest Rate on A Fullerton India Personal Loan
There are various factors that affect personal loan interest rates. You can consider the following practical tips to get a personal loan at the lowest interest rate.
1. Maintain a High Credit Score
When you seek an unsecured personal loan, your credit score is vital for the lending institutions. It represents a borrowers’ creditworthiness based on their debt repayment history. Every lending institution considers your credit score before offering you loan terms. Most lenders prefer a 750+ score in India to offer favourable terms, including lower interest rates. A score of 750+ is considered enough for high trustworthiness. A higher credit score is the result of well-treated debts. A lower credit score may lead to your loan application’s cancellation. Make sure you pay your debts, credit card bills, and other loans EMIs on time to maintain a high credit score. It can also reduce your loan interest rate.
2. Opt for a Co-applicant
You can take the help of a co-applicant to get personal loans at reduced interest rates. A co-applicant is an individual, family member or reliable family friend with whom you can apply for a personal loan. If any of your family members has a stable income, you can reduce your EMI burden with a reduced interest rate on your loan. A joint loan application is helpful if your credit score is low. It increases the chances of availing of a personal loan at a reasonable interest rate. You can compare personal loan interest rates based on an applicant’s eligibility using an online personal loan calculator provided by several financial institutions.
3. Maximise Down Payment
Interest rates on loans are also affected by the loan amount. You can pay a maximum down payment to reduce the loan amount and reduce the interest rate on your loan.
4. Prefer a Shorter Term Loan
A long term loan can decrease your EMIs, but ultimately it increases your interest rates. If you want to reduce your loan interest rates, it is in the best interest to apply for a loan with shorter tenure.
5. Keep an Eye on Occasional Offers
Lending institutions keep serving consumers with special or festive offers on loans. These offers are attractive in terms of interest rates and affordability and are valid for a limited period. Keep an eye on offers to grab such opportunities to finance your goals at a reduced interest rate.
6. Repayment of Debts to increase Disposable Income
If you have multiple outstanding financial obligations to repay, it will leave you with less disposable income, resulting in a higher interest rate. You can list your debts to be repaid and prioritise them based on higher interest rates. Paying off costly debts faster will create high disposable funds and reduce personal loan interest rates with good financial status.
7. Look for Pre-approved Offers with Existing Financier
You can look for pre-approved loan offers with your existing loan provider. It is necessary that you maintain a good relationship with your existing loan provider to get a personal loan at easy terms. If you keep paying your EMIs on time, it will boost your relationship with the lender.
8. Negotiate with the Financier for Reduced Interest Rates
You can consider negotiating with the lender regarding loan terms, including interest rates, provided you have a good credit history, a high credit score, a lower credit utilisation ratio, and sound financial background to repay your loan. If the lender agrees with your statements, it can think of proposing more favourable loan terms.
Elements Affecting Personal Interest Rates
Following are the important aspects you should consider to get favourable loan terms:
- Age of the loan applicant – Younger loan applicants attract lower interest rates compared to those closer to their retirement.
- Employment – An unstable job profile attracts a higher interest rate. A salaried individual employed at a reputed organisation can utilise bargaining power better to get favourable loan terms .
- Debt-to-income ratio: Maintain a lower debt-to-income ratio to simplify personal loan terms, ideally lower than 30%.
Make sure you consider every aspect of a credit facility with a financial institution, check your eligibility, and then apply for a personal loan. A rejected application can decrease your credit score.
