Availing of a personal loan has become very easy and hassle-free now these days as many lenders have shifted to offering a digital experience. Today, you can not only apply for a personal loan online but also can avail loan approval and loan amount in your bank account within a matter of a few minutes only.
However, apart from getting fast loan approval, it is also imperative to avail attractive personal loan interest rates because the interest rate offered on a personal loan determines the total cost of a personal loan. A lower rate of interest means lower EMIs, as well as lower EMIs, cost over the loan tenure. This way, you can minimize the borrowing cost and enjoy a more comfortable repayment experience. Hence, finding a personal loan at a competitive interest rate is a must.
Here we have mentioned some useful tips that you can use to avail a personal loan at a low-interest rate.
Compare banks or lenders to avail the best offer.
Before you apply for a personal loan with any particular bank, make sure you compare the personal loan interest rate of all banks because each bank offers a different interest rate on a personal loan. For example, HDFC personal loan interest rates are different from ICICI and SBI banks. Ultimately, this will help you to avail a personal loan at an attractive rate of interest. This process might take some time, but you will end up making the right and well-informed decision.
Maintain a good credit score
Since the personal loan is unsecured, one of its most important eligibility criteria is a good credit score. Based on your credit score, lenders check your creditworthiness and know how you have managed your credit in the past. A credit score of 700 or 750 makes you a good applicant for a loan. The higher your credit score, the higher the chances of getting a-HDFC personal loan interest rate at lower terms.
Get Seasonal Offers
Most banks or lenders provide seasonal offers to their customers, such as personal loans at a low rate of interest, no processing fees, and much more. In addition to this, some banks or financial institutions offer a customized pre-approved loan deal. For example, you can find competitive HDFC personal loan interest rates during festive seasons. So, keep an eye on these lucrative offers to avail of a loan at the best interest rate.
Make the most of your professional credentials.
You can negotiate the personal loan interest rate for all banks by making use of your professional credentials. If you are working with a reputed organization and getting a high salary, it makes you a financially stable candidate in the lender’s eye. Hence, you can use this privilege to avail a personal loan at affordable rates. Your employer’s good reputation can help you get the best interest rate since the lender gets assured that you will be able to make timely repayments.
Get a Personal loan from a bank you have a relationship with
One of the easiest and best ways to avail of a personal loan at a competitive interest rate is to apply for it with a bank or financial institution you have an already relationship with. Generally, banks or lenders tend to offer a personal loan at the best rate for their existing customers since they are aware of their financial background. In addition to this, many banks also provide their existing customers with lucrative deals and attractive interest rates as a reward. For example, HDFC personal loan interest rates are very low for its existing customers.
Maintain a good credit score
Having a good credit score ensures that you clear your debts on time and don’t have any outstanding debts you-this will make you a potential borrower in front of lenders. In case you have a low credit score, maintain your credit utilization ratio by keeping it within the 30 percent limit and keep checking your credit report.
Check the interest calculation method.
Before availing of a loan, find out the method of calculating the interest rate the lender chooses. The lender may give you a loan at a reducing or flat interest rate. In the case of a flat interest rate, the payment of interest is calculated on the full loan amount throughout its tenure. And in another that reducing the interest rate, the interest payment is calculated on the outstanding principle where gradual reduction in the loan amount will affect your interest rate to go down as well. Hence, one can see that availing of a personal loan at a flat interest rate will cost you more if compared with a reducing interest rate.
Comparison of Personal Loan Interest Rate Offered by Leading Banks
Personal loan interest rates for all banks might vary from one to another. To help you avail the best rate, we have mentioned some of the leading banks that offer competitive interest rates on personal loans.
|Bank Name||Rate of Interest Rate (per annum)||Processing Charges (% of the loan amount)|
|HDFC Bank||10.25% to 21%||Up to 2.5%|
|ICICI Bank||10.5% to 19%||Up to 2.5%|
|State Bank of India||9.6% to 13.85%||0|
|Bank of Baroda||9.10% to 15.35%||2%|
|Punjab National Bank||7.9% to 14.5%||0|
|HSBC||9.5% to 15.25%||Up to 1%|
|Standard Chartered Bank||11% onwards||1%|
Note: The above-mentioned personal loan interest rates may change and will depend on the sole discretion of the bank & RBI. The personal loan interest rate for all banks that are mentioned in the table is updated as of March 2022.
The Final Word
With these aforementioned tips in mind, finding the best interest rate on a personal loan is not rocket science. Also, make sure you compare some of the leading bank’s personal loan interest rates, such as HDFC personal loan interest rates, ICICI personal interest rate, SBI personal loan interest rate, etc. This will help you to find the best interest rate on a personal loan.