- Mumbai Live Team
- Business
Saving a portion of their income for a financial emergency is not feasible for a lot of people. Hence, upon the arrival of the stormy days when we lack the financial resources, we all seek something that lifts the burden off our shoulders. That is where a personal loan comes wearing a cape like a knight in shining armour.
Popularly known for being collateral-free, anyone can avail personal loans with instant approval from banks and even non-banking financial companies. You can use this instant cash for a variety of purposes ranging from medical expenses, wedding, foreign travel, study abroad fees, home renovation or short-term cash. The only drawback that arrives with getting approved for a personal loan is the hefty interest rates.
With a little bit of planning, you can manage to get the best personal loan interest rates. Here's how:
Look for pre-approved loans - Pre-approved loans take lesser time for processing and carry competitive interest rates since the lenders conduct thorough background research and evaluation on the borrower beforehand. With a guarantee of secure financial standing and credit history, the disbursal of your loan amount takes lesser time. That significantly reduces the hassle you might have to undergo if you approach the lenders or financial institutions on your own. Pre-approved loans encourage minimum documentation and maximum ease.
Aim for instant approval with the best personal loan apps - With digitalisation exceedingly seeping into all of our daily lives, it is time we accept it and smartly use its resources to fulfil our financial needs. Most banks and lenders take a lot of time to process a loan application. But you don't have to haggle through that anymore since the market is filled with personal loan apps that offer hassle-free immediate loan within India in under an hour! You can compare from best personal loan apps like MoneyTap, Loan Credit, LazyPay, and many more.
Work to improve credit score - Unpaid debt and dues create a severe hurdle when you are trying to get a personal loan approved since they put a dent in your credit score. A low credit score makes it difficult for the lender to trust in your financial health, and you might have to hustle too much or pay too high an interest rate to get instant cash during an emergency. Ideally, maintaining a credit score of 750 and above by paying all your bills, debts and previous loans on time will get you the best interest rate when applying for a personal loan.
Negotiate and compare the lenders - If you can compare the prices of clothes on different websites to get the best deal, why not put in a little effort when comparing personal loan interest rates? Finding the best, unsecured line of credit will come down to your research and negotiation with the lender who can fulfil your financial need without having to give up too much. It is a two-way street where both the lender and the loan applicant match each other's expectations. So don't hesitate to negotiate your terms as well.
Avail loan for short term - Simply put, the more time the loan money stays with you, the more interest you will have to pay which will eventually pressurise your financial stability. So it's wise to plan for loans with shorter tenures and plan your repayment schedule accordingly to save a hefty amount on interest.
Qualify based on your professional credentials - A high-salaried, reputed public or private sector employee is undoubtedly an ideal candidate in the eyes of a lender for fairly obvious reasons. With a strong professional background, you can convince the lender to offer you the best interest rate on your personal loan application since it assures them that you will repay the loan on time. Wisely use your firm's reputation to secure your loan.
Availing a suitable interest rate on personal loan might seem a bit overwhelming at first, but keep these tips in mind and begin your research early on to land up with only the best.
Author Bio:
The above article is shared by Shiv Nanda, who is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at shiv@moneytap.com.