Working professionals as young as 21 years look for Personal loans, as they are ideal credit products to tackle any financial crisis or fulfill any wish. These loans have no pre-determined end-use restrictions; they are available without collateral or security and quickly disbursed to fund urgent expenses. However, most people are concerned about the interest rate they must pay to repay the borrowed amount.
Getting a Personal Loan at the lowest interest rate is the best loan plan to help cover the costs without significantly increasing the financial burden. To calculate interest rates, a Personal Loan calculator online is the best tool, available for free on the website of top lending institutions.
Here are some tips to secure a Personal Loan at lower interest rates.
1. Maintain a Decent Credit Score
Having a decent score enhances an individual’s ability to secure a Personal Loan with the desired loan size at reasonable interest rates. A high credit score indicates sufficient creditworthiness and responsible credit behavior.
Making timely debt payments, reducing the credit utilization ratio, maintaining a well-balanced credit mix, and avoiding multiple loan inquiries simultaneously are efficient ways to keep a high credit score. Lending institutions like Clix Capital consider a credit score of 630 to consider a Personal Loan application.
2. Decide on the Right EMI Amount
Any 21-year-old professional can use the online Personal Loan Calculator to plan their loan. The calculator, available on the websites of reputed lending institutions, helps calculate the projected EMI based on the loan amount, rate of interest, and repayment tenure.
If required, the applicant can increase and decrease the loan tenure or even the loan amount to achieve their desired monthly installments.
3. Fulfill Eligibility Criteria
An applicant can expect the best interest rates if they fulfill the eligibility criteria for Personal Loans, including the age requirement, credit score, financial obligations, minimum income, and other parameters.
A 21-year-old applicant should check their eligibility on the website of the preferred lending institution of NBFC to secure the best loan deal.
4. Leverage Existing Relationship with an NBFC
Maintaining a good relationship with an NBFC helps secure a Personal Loan with the lowest interest rates. Those with a consistent repayment history and responsible credit behavior often qualify for low-interest-rate loans from the same loan provider.
It happens because the lending institution is already aware of the applicant’s credit-related habits and feels confident in lending them more money due to the lower risk involved.
5. Have a Good Employment History
Maintaining a stable and long employment history enhances an individual’s loan eligibility and helps them when confused about how to get a low-interest rate Personal Loan. Lending institutions often prefer applicants with an employment history of at least one year and a work experience with the current employer for at least six months.
Those who keep changing jobs frequently have more difficulty getting a personal loan at low-interest rates. Salaried professionals working in reputed private organizations or government departments get more favorable rates and terms on Loans.
That is because these applicants have stable incomes and are less likely to default on their loans.
While these tips and practices seem simple at first glance, they can take an applicant a long way in securing the lowest interest rate on a Personal Loan.
A 21-year-old applicant can calculate their loan EMI after entering the loan amount, repayment tenure, and interest rate using a Personal Loan calculator.
About the Author
Amaira Sharma is a finance expert and former business growth strategist who has more than 8+ years of experience in the industry, now she helps others to get better financial stability and standards. She loves to write useful tips on personal finance and businesses.