A personal loan is a convenient financial option that can be utilized to pay off various expenses like weddings, medical expenditures, home renovation, and funding your dream vacation.
The biggest advantage of a personal loan is that the lender will not impose any restrictions on the loan value, which means that you can utilize the borrowed amount for a wide range of purposes.
Also, you don’t need to promise any collateral such as cash, property, shares, etc. to the creditor as it is an unsecured loan. A personal loan gets approved in a relatively short period because it requires minimal paperwork.
Being a handy fiscal instrument, a personal loan calculator will instantly help you to obtain a personal loan without any hassle.
The following are some tips you can follow to get a personal loan at low-interest rates.
- Try to improve your CIBIL or Credit score: –
The credit score is one of the most crucial factors that the credit bureau takes into consideration while deciding whether or not the loan is to be approved. Therefore, if you wish to apply for a personal loan, then you should concentrate on improving your credit score. A credit score of 750 or above is always worthwhile.
This is because a good credit score will convince the lender that you are financially capable of making on-time repayments on your current loans. Additionally, a borrower with a higher CIBIL score will be more attractive to lenders who consider such individuals as creditworthy borrowers. Therefore, lenders will offer loans at lower interest rates to such borrowers.
You can improve your credit score by spending responsibly on your credit card every month and paying it off in full by the payment due date. This will help increase your credit score.
2) Keep your current debts low or non-existent
When you have little to no outstanding debt, you will have a stronger chance of getting your personal loan approved at a lower interest rate. Having multiple or heavy outstanding debt, especially if there is a poor credit history, means that lenders will perceive you as already being too financially burdened to take on another loan. In case your application does get approved, you may have a higher interest rate levied on the borrowed amount.
Try to pay off all your debts on time in order to increase your credit score and also demonstrate to lenders that you have the financial capacity to take on a larger loan.
3) You should use a personal loan calculator when applying for a personal loan: –
You can use a personal loan calculator by Upwards to determine whether or not you are capable of making timely repayments. It will help you to conveniently calculate the EMI that you are required to pay every month to the creditor without any manual calculations.
In the long run, it helps to boost your credit score and assists you in managing your finances efficiently. You just need to enter a few details like the principal amount, the repayment tenure, and the rate of interest and within seconds it will provide you with an accurate result. A personal loan calculator by Upwards will help you to accurately calculate your monthly EMI to easily repay the amount without fail. You can use it here: https://upwards.in/emi-calculator and apply for a loan accordingly.
4) It is important to figure out how the rate of interest is computed: –
When you are seeking low-interest rates on your loans, ensure that you thoroughly go through all the terms and conditions as these creditors often extend the repayment period on personal loans which offer reduced interest rates. Most of the banks and other financial institutions provide a rate of interest that ranges between 10.50-15.10%.
An increase in the duration of repayment tenure means that you will be unknowingly paying a larger amount of money as interest until the repayment period ends. Hence, if you will make uninformed choices, then this whole process can take a toll on your budget.
Therefore, by considering these tips, you will surely be able to obtain the best interest rates on a personal loan from reputed and reliable creditors.