5 simple ways to reduce personal loan interest rates
Personal loan interest rates seem to be the most important topic for discussion among borrowers. Of course, this is not without reason; the interest rate you pay will decide the overall cost of your loan! This puts lower interest rates at the centre of most people’s personal loan hunt. If you too are looking for ways to reduce the interest rate applicable on your loan, this article will help you out by highlight 5 simple ways to slash your rates.
1. Compare online.
Your best bet for lower personal loan interest rates is the internet. There are numerous aggregator sites that compare the top loan offerings in India. One visit will put all your options before you and you can find the finance solution that is made available to you at the lowest rates.
2. Work on your financial profile.
Your financial profile is everything when applying for a personal loan. If you have a good financial profile, then lenders will go to great lengths to get you on board as a customer. So, before you apply, make sure you work on things like your credit score. A higher score gives you immense amounts of leverage to haggle a better rate out of your lender. If it is lower than 700, then you definitely need to work on it and even if it is above that, it makes sense to work on it before applying.
If you’ve borrowed from a certain lender before and successfully repaid the loan, it makes sense to go back to them to at least inquire about the rates. Your previous repayment history should give you something to leverage to get lower rates.
Refinance or balance transfers are another great way to enjoy lower personal loan interest rates. You can look for lenders ready to provide lowered rates if you transfer your existing loan to them. In fact, just threatening to do so could get your lowered rates – simply inform your current lender of your decision and they might give you a reduction to keep you on as a customer.
5. Reduce the interest payable.
If you cannot reduce personal loan interest rates, you could try cutting down on the total interest you pay. There are several ways to do this, of them, prepaying is one of the most efficient methods. When you prepay a loan, the principal amount reduces. Since interest amounts are calculated on your outstanding balance, prepaying automatically results in lower interest payments.
Some borrowers also suggest applying for a loan at the end of the month. This is because it is at this time when personal loan sales executives have to meet their targets. This might leave them more open to a bargain as compared to the start of the month when the target is still far-off.
These were 5 ways to reduce personal loan interest rates. If you have any doubts regarding these pointers, it would a good idea to ring-up or get in contact with one of the many personal aggregators. They would give you unbiased advice on how to enjoy lower rates.
We hope this article has been helpful, good luck and all the best!