21 MAY, 2020

Personal loans are one of the most viable ways to tackle your sudden financial requirements. The amount secured through this kind of loan can be used to serve various purposes. This includes paying educational fees, wedding expenses, going on a holiday and even covering medical emergencies. It helps you make urgent payments with much ease. Personal loans are also disbursed at a much faster rate and you do not have to be hassled by excessive documentation. It thus comes as no surprise that they are the most sought-after loans in the financial market. However, a personal loan is only beneficial when you seek one at considerable interest rates. Personal loans with attractive interest rates will let you enjoy the big benefit of repayment-ease.

Here are 4 tips that you can employ to get the best personal loan interest rates:

Build a good credit score - Before you apply for a personal loan, ensure that you build a strong credit report. Having an excellent credit score will increase your chances of availing a personal loan from most banks and hence will provide you with better options. It also gives you an upper hand when making negotiations with the bank. Thus, you should put in greater effort into building a clear credit history.

Take advantage of offers – Banks commonly run seasonal offers from time to time. These offers bring you personal loan interest rates that are much lower than those that are regularly offered. However, these offers can only be availed for limited-periods. You must keep an eye out when these are being run or subscribe to lender notifications.

Maintain a good relationship with the lender - A lender is likely to offer you a much better interest rate when you are a loyal customer. Based on your relationship with the bank, you may be offered special customer discounts. This includes better interest rates with the aim to retain you as a customer. Additionally, the bank is assured of your repayment behavior, increasing your chances of availing the loan without much hassle.

Prove professional credibility – Banks believe that an employee of a well-reputed company and one who draws a significant salary makes for a great loan-candidate. Thus, if you work for a reputed organization, you can use this factor to your advantage. Prove to the bank that you have a stable income and you are likely to be offered a more competitive interest rate on the personal loan.

Read More: Is the Rate of Interest on Your Personal Loan Negotiable

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.