Personal loans can help meet urgent financial needs, but the interest rate you’re offered greatly impacts affordability. The good news is, with smart planning, you can secure a lower personal loan interest rate and save money.
1. Maintain a High Credit Score
Why it matters: A credit score of 750+ shows lenders you’re a responsible borrower.
Impact: Higher scores increase your chances of getting loans at reduced interest rates.
Tip: Pay EMIs and credit card bills on time to maintain a good score.
2. Compare Lenders Before Applying
Why it matters: Interest rates vary across banks and NBFCs.
Impact: Comparing lenders ensures you get the most competitive rate.
Tip: Use online loan comparison tools before finalizing.
3. Choose a Shorter Loan Tenure
Why it matters: Lenders often charge lower interest rates for shorter repayment periods.
Impact: EMIs may be higher, but total interest paid is lower.
Tip: Opt for a shorter tenure if your income allows.
4. Show Stable Income and Employment
Why it matters: Lenders prefer borrowers with steady jobs or consistent business income.
Impact: A stable income profile builds trust and leads to better offers.
Tip: Submit updated salary slips, bank statements, or ITRs as proof.
5. Negotiate With Your Lender
Why it matters: Existing customers with a strong repayment history can request concessions.
Impact: Lenders may reduce the interest rate to retain loyal borrowers.
Tip: Highlight your relationship and repayment record with the bank.
6. Consider a Loan Balance Transfer
Why it matters: If your current loan has a high rate, you can transfer it to another lender.
Impact: A balance transfer often comes with lower rates and better terms.
Tip: Check for processing fees before transferring.
FAQs
Q1. What is the lowest personal loan interest rate in India?
Rates start from around 10% per annum, depending on the lender and your credit profile.
Q2. Does my employer affect loan interest rates?
Yes, working with reputed companies or government organizations may help you get preferential rates.
Q3. Can I reduce my personal loan EMI?
Yes, by opting for a longer tenure, but this may increase total interest outgo.
Q4. Is it possible to negotiate with banks?
Yes, especially if you have a strong repayment history and relationship with the lender.
Published on : 3rd September
Published by : SMITA
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