When borrowing any loan, we should try to get as favourable terms as possible. Of all the other terms of a loan agreement, getting a competitive rate is the most important. A lower rate makes repayment smoother and affordable. It helps you ensure you’ll be able to honour the repayment commitments in a timely manner.
There are several steps that can help you fetch a competitive rate on your personal loan. So, when you’re deciding how to get a personal loan, incorporate these into your prep schedule:
Maintain Your Credit Score
The first and foremost thing to do is check your credit score. Your credit score is a three-digit number ranging anywhere between 300 to 900, allocated by TransUnion CIBIL, that indicates your creditworthiness.
In simple terms, it shows your ability to repay by taking into account several factors: your current debt, your past debt repayment history, the length of your credit history, your credit mix. In the range of 300 to 900, a higher credit score is better. The higher your credit score, the higher your chances of — first of all — getting approvals for the loan.
So, how to get a personal loan with a lower interest rate and competitive terms of agreement? Maintain a good credit score and check it before applying for a loan.
One of the primary determinants of our creditworthiness is your past payment behaviour. If you pay your credit card bills and EMIs in a timely manner, you will be able to get competitive personal loan terms. Delinquency in making these payments on time can negatively impact your credit score, so we suggest you to use an EMI Calculator for personal loan or setting up reminders in your calendar.
You don’t want your lender to have the impression that you’ll be a handful when it comes to making timely repayments. Consistency will go a long way in helping you land favourable terms of a loan.
What happens when your past record isn’t squeaky consistent? How to get a personal loan with favourable terms? One thing you can do to convince your lender is show proof of potential future consistency. You can disclose your salary proof, any income sources you have, etc to show that you have enough to repay the loan instalments on time.
Explore Your Options
Before diving into any financial transaction that has long-term implications, it’s best to weigh all the alternatives available to you. Try all permutations and combinations by adjusting the amount and time period of the loan to land on the most favourable terms. If you can repay fast, you can get a lower rate on it.
Make use of the EMI calculator for personal loan to pre-empt your financial needs. After all, you don’t want to default on repayments. If you already have a loan, consider a top up personal loan to expedite the process.
For example, at Finserv MARKETS, there’s instant approval and quick disbursal, as fast as 24 hours of approval of your personal loan. You can even explore the pre-approved offer to see if you can secure funds without the need for application and with minimal documentation.