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09 MARCH, 2022
Mr. Rachit wanted to go on a vacation to South Africa for a long time. However, he was reluctant to exhaust his earnings on a trip. He planned to avail a personal loan for the same. While he was looking for the best personal loans to apply for, he came across an article where an expert had explained aspects of personal loans. Reading the article, he came to know that the personal loan interest rate constitutes a major portion of the repayment amount, and so borrowers should strive to get the lowest interest rates. He also has to know about the ways to get affordable interest rates for personal loans.
Getting the lowest and most affordable interest rates can significantly reduce your cost of borrowing. If you plan to avail a personal loan soon, read the following ways that can help you get affordable interest rates.
Your credit score is a reflection of your creditworthiness and credibility. The credit score is measured on a scale of 300-900. The higher your credit score, the more reliable a borrower you are for the lender. Having a high credit score thus helps to get lower personal loan interest rates and better deals on your personal loan. You must maintain a healthy credit score at all times. A few ways to have a good credit score are - a) Pay your bills and dues on time. b) Avoid applying for loans with multiple lenders at the same time. c) Check your credit report periodically. If you find any discrepancies, you must ask the bureau to rectify them. d) Maintain your credit utilisation ratio below 30 percent, etc.
You must pay off all your debt before you avail a personal loan to get attractive interest rates. If you have multiple debts at different rates, you can consolidate all your debts to pay them faster. Also, do not maximize your credit cards.
Many lenders roll out attractive offers and promotional events during festive seasons. You can know about these offers through promotional offers or advertisements. You can get lower interest rates and better deals by opting for such offers.
Lenders prefer lending money to borrowers who have a steady income source. Therefore, before applying, you must review your employment history. You must not change your job or profession recently if you plan to avail a loan. In addition, you must be employed with the same lender for at least two years consequently. Similarly, lenders prefer lending money to a borrower employed with credible employers like multinational companies, government, PSUs.
The best way to get affordable interest rates is by reviewing your finances and ensuring there are no red flags in it. Ensure to have a high credit score, review your credit report, and pay off your debts. Moreover, ensure that you provide all documents required for personal loan to avoid rejections and negative marks on your application.
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