How to get the low-interest rates on Personal Loans?
With the advancement of technology, availing personal cash loans has become easier than ever. Earlier people use to visit the lender’s shop to avail a loan, and then people started visiting the banks for loans, but now people open their mobile phones, and in just a few clicks the loan is credited. Now along with loan principal, borrowers are offered good customer service plus best interest rates to fit into their bills. Earlier this wasn’t the case. The interest rate is now controlled by the government to stop the lenders from skyrocketing their interest rates. Availing low-interest personal loans
is not difficult. There are certain metrics that you need to maintain. Let’s see how we can avail quick personal loans at low-interest rates?
Research: Before availing a personal loan, educating yourself about it should be the first thing you need to do. Reading about the loans and lenders will not only make you aware of the new changes in the monetary policies but also help you get the least interest rates. When you research, you learn about the various other lenders and banks and their interest rates. Having a hold on this valuable information will be beneficiary because then you can make the right decision about the loan. So, get your laptop, type low-interest personal loans in “name of your location” and then read blogs of all the lenders. See who fits your bill.
Credit Report: When you pay your loan bills on time, you’re improving your credit score. Paying loan EMIs boosts the credit score by 35%. Which means just by being punctual with loan EMIs you’re improving a credit score and availing a cheaper loan next time or if you have done it in the past then you’ll enjoy cheaper loan in the present. Try to avoid availing parallel loans as having multiple debts at the same instance affects the credit score by 30%. If you’re a person that avails a loan for a longer duration, then your credit score will be boosted negatively by 15%. This tells the credit union about your lending behaviour. Availing an unsecured loan all the time affects the credit score by 10% hence it is advised to avail a secured type of loan. Finally, it is the new credit that affects your credit score by 10%. So, when you improve your credit score, you prove yourself as creditworthy and entertain low-interest loans. Having a good credit score will help you get a low-interest rate on your loan and vice-versa.
EMIs: Not every shiny object is gold, likewise just because the EMI looks smaller doesn’t mean you are paying less. Often borrowers live in this delusion of smaller EMIs. They forget to do the maths. Of course, the EMI is smaller, but when you keep paying a smaller EMI for a longer period, you’re paying more in interest. This is the delusion people need to uncover their brains. So, it’s advised to avail a loan with bigger EMIs as you will be paying the least interest then. Always calculate the EMIs and compare. Don’t blindly sign the fine print because you’re getting a loan. The lender also needs you as much as you need them.
Loan Tenure: Loan tenure is one of the factors that are in your hand and can open the doors to low-interest. Opting for a short tenure loan makes you save a lot in interest because in a short tenure loan the EMIs are large and when the EMIs are large then, the loan gets cleared in short tenure. This makes you save a lot. Had you chosen a longer tenure and small EMIs then you would have paid a lot more in interest.
Collateral: The next biggest factor that will get you low-interest rates irrespective of your credit score is collateral. When you have collateral backing your loan application, then lender offers low-interest rates, but this also depends on the lender. Some offer lower interest rates than others, therefore research well before availing a loan.