How To Get The Best Personal Loan Deal?

2 mn read

A personal loan is a borrower’s boon as it does not have any end-usage restrictions. The amount can be used to fund a wedding, travel plans, medical needs, or practically anything under the sun. You can even take a personal loan to keep it as your emergency fund, though no expert will give this recommendation. 

With such benefits, a personal loan becomes the most comfortable financial cushion for most borrowers. But apply for a personal loan  deal needs research and action. A good personal loan deal is when the interest rates are low, a high loan amount gets approved and you get a comfortable tenure which doesn’t add pressure to your monthly budget. 

To get such a deal, here are a few things you can do:

Maintain a good credit score

A bank looks primarily at your credit score and repayment capacity when approving your loan. A low credit score can reduce your loan amount and increase your interest rate. So, maintaining a high credit score is the aim. Improve your credit score by gradually clearing your debt and dues. A score of 750 and above gives you a higher chance of bagging a better personal loan deal. A few ways to do this are

  • by maintaining your credit utilisation ratio within the 30 percent limit,

  • checking your credit report regularly,

  • avoiding direct loan and credit card applications to lenders and

  • keeping a healthy credit mix of both secured as well as unsecured loans

Maintaining a healthy repayment history.

A good repayment history shows creditworthiness. So, you must pay off your debts every month timely. A single missed payment may not incur you any significant losses, but it shows in your credit report. Pay your EMIs and credit card bills on time. It helps you in getting a better deal whenever you take another loan in the future because if your EMI repayment history is good, you will have a better chance to negotiate on interest rates with the lender.

Showing employment stability

The lender must see you as a credible borrower. A borrower who frequently changes jobs or has gaps in their employment history shows low creditworthiness. Lending institutions look favorably at loan seekers employed with the state or central government, PSUs or quasi-government organizations. This reflects in the interest rates offered.

Compare personal loan deals from several lenders

Choosing one lender for your personal loan on your first go might not be a great idea. It is essential to visit multiple lenders, check your eligibility and EMI using their personal loan EMI calculator, check their interest rates and then decide. Due to the stiff competition amongst lenders, there are always discounts and offers in the market which can be beneficial for you. You can get low-interest rates, or a pre-approved loan, or a reduced EMI at such time. Keep an eye out and do your research before choosing your lender.

A good personal loan deal can hand you the cash flow you need in times of need and without any strings attached.

 

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