A personal loan offers convenience and flexibility, as you can apply for it easily and use it for a variety of purposes. In fact, you don’t need to furnish the reason for which you’re applying for a personal loan. In addition, you don’t even have to pledge collateral. Add a substantial sanction and quick approval and you have an extremely feasible option to fund any and every requirement.
To get a personal loan sanction at a low interest rate, there are some eligibility terms that you need to qualify for. These terms of eligibility vary across lenders but, here are some of the common factors that can get you an affordable sanction.
Your credit score is a reflection of your creditworthiness and financial discipline. It also speaks about your debt repayment behaviour in the past. A credit score ranges between 300 and 900 and a score of 750 and above ensures that you pay a nominal personal loan interest rates. When you make timely repayments on your loans and credit card dues, your credit score increases. In contrast, when you delay an EMI or default on the loan altogether, your credit score dips.
Lenders reward your good credit behavior by offering low personal loan interest rates because they are assured of receiving their dues on time. A bad credit score, in contrast, poses a risk because of which lenders charge higher personal loan interest to protect themselves.
When you earn a high income, you are in a better position to repay your loans on time. On the other hand, if your income is low, you may not have the funds you need to repay your loan. It implies that you may delay or miss your EMI payments or default on the loan, which spells a greater risk for lenders. The matter of fact is that a higher and stable income attracts competitive personal loan interest rates. Also, lenders charge lower interest if you are employed in a reputed organisation. This gives them a sense of security as they think you have a stable career and income.
Loyalty goes a long way in every walk of life. Likewise, if you have a long and good relationship with your lender, it puts you in an advantageous position where you can negotiate for affordable interest rates. This is because lenders like to retain their existing customers and not lose them to their competitors. However, you should also be a customer with good creditworthiness. As such, if you apply with a bad credit score, even your existing lender will charge higher interest rates.
Now that you know the top three primary factors that determine how affordable your personal loan interest rate will be, keep them in mind while applying. When looking for the right personal loan, apply for a loan with reputed lenders like Bajaj Finserv who have simple personal loan eligibility criteria and offer easy repayment facilities. As a salaried employee, you can access a sanction of up to Rs.25 lakh at nominal interest rates. You can choose to repay this amount through a flexible tenor spanning 12 to 60 months.
Opting for a flexi personal loan facility, on the other hand, allows you to borrow as per your needs, multiple times, from your sanction. Here interest is charged only on the amount you withdraw. Moreover, you can also make part-prepayments on your loan anytime during the tenor. Additionally, you can choose to pay interest-only EMIs throughout the tenor and repay the principal amount when the tenor is up. This way, you not only save up to 45% on EMIs but also enjoy a better cash flow. To benefit from quick approval and disbursal of the loan, check your pre-approved offer from Bajaj Finserv right away!