In some or other time every human are supposed to take a personal loan this may because you are facing some financial emergency or a health issue. Probably you need to pay off for a major expense without cutting your saving account. Whatever the reason would be a personal loan will help you to come out of these situations.
Before applying for a personal loan it is must to research and compare all the rates of personal loans from different banks. A bank or financial institute will not stick to the same interest rates. However, getting the best rate for your personal loan is not as easy as it seems. So if you are looking for a best rate personal loan here we provide some tips for it. Take a look.
Improve your credit score:
Banks always approve a personal loan easily to those who have a good credit history. A good credit score gives you more chances of getting favourable rates for your personal loan. So Before applying for a personal loan, check your credit score which is provided by AI Etihad credit bureau.
Banks prefer individuals with a credit score of over 700, so it is just to maintain your credit score at this level.
Avail Seasonal Offers:
Banks offer lower Interest rates in some times to match up to the competitive corporate rates being offered by other banks. Especially these schemes are launched festive season and last for a limited period only. Taking up a personal loan during such times is very beneficial and could help you cut down on your loan expenses.
Maintain a good repayment track:
You know banks always look into credit report to evaluate your creditworthiness before issuing a loan for you which means they look in your record of how often you pay for other credits. So to get the best rate for your loan it is very important to have a healthy long term credit record, you will be at a better position for negotiating on interest rates.
Understand Interest Calculation Method:
Before applying for a personal loan, You must have some knowledge of how your interest s calculated. Just checking for loans at a low-interest rate is not good enough. Sometimes the advertised rate may be the lowest interest rate but the calculation does not include the gradual repayment of principal and interest amount.
Some times you may fall under a flat rate that could cost you more than reducing balance interest rates. A reducing/diminishing interest rate means it is the interest is charged only on the monthly outstanding principal balance. Whereas a flat rate makes you pay interest towards the loan amount throughout the entire loan tenure.
Choose a shorter personal loan term
The sooner you return the loan the lower the interest rate you get. That means banks or financial institutes will offer their best personal loan rates for short-tenure loans. A short personal loan term ranges from three to five years or less.
If you opt for a short personal loan it will gradually increase your monthly EMI. Hence, think twice before you decide. If you want to get low personal loan rates, try to choose the shortest personal loan term. Keep in mind, It is important to keep your monthly payments manageable.
A small relief in your interest rate will help you to save a lot and add to your savings. Hence never give up a chance try to implement above e-mentioned tips will help you to get the best rates for your personal loan.