5 simple ways to reduce personal loan interest rates

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Are you worried due to high personal loan interest rates? Go through our blog to know about ways to reduce them and leave your worries behind!

Though personal loans such as icici personal loan are easily available but huge variations are observed, at times, in terms of the personal loan interest rates, offered by different banks/ financial institutions. Therefore, it is imperative that you compare the personal loan interest rates offered by different lenders before making an informed decision regarding the lowest interest personal loan product to avail.

As personal loans are of unsecured types, banks adhere to certain credit policies (specified set of rules) before deciding on the amount and the personal loan interest rates to approve. Many borrowers fail to fulfill these basic criteria and hence, either their loan applications are rejected or they fail to get the best personal loan interest rates. Even if their applications are granted in some cases, they end up getting loans with higher personal loan interest rates or with other stringent terms attached.

The following 5 simple tips will help you to improve your chances for getting a personal loan with reduced personal loan interest rates you desire.

  1. Check your credit score and look for ways to improve it

Before you apply a personal loan, it is highly imperative for you to check your credit score. Credit bureaus such as CIBIL and Experian usually provide personalized credit reports inside 24 hours. With a higher credit score you can project yourself to be more creditworthy to lenders such as icici personal loan. On the other hand, with a bad credit score, your loan application will be in danger of getting rejected or you may be levied higher personal loan interest rates as compared to borrowers with better credit scores. Some ways to improve credit score ate listed below-

  1. Avoid the tendency to buy new credit cards
  2. Check your credit reports for accuracy
  3. Pay off dues on time
  4. Do not apply for credit accounts too often
  5. Leave open unused credit accounts

2. check for tenure-based discounts

Do have a check on whether your lender is offering a tenure-based discount. Some lenders like icici personal loan offer lower personal loan interest rates for some specific loan tenures and try to opt for such tenures, if such a scheme deems suitable to you.

3. Weigh up different lenders

Look beyond your salary bank and weigh up options from other lenders as your salary bank may not always offer you the best schemes with reduced personal loan interest rates. Have a check on the offers related to low personal loan interest rates provided by leading lenders like icici personal loan for salaried customers from time to time. Some lenders such as icici personal loan provide irresistible personal loan interest rates for employees of large and reputed companies. The personal loan interest rates may also vary depending on how your employer is categorized by a particular lender. Please consider this while comparing personal loan interest rates from multiple lenders. Also, certain banks/financial institutions such as icici personal loan offer reduced personal loan interest rates during festive seasons such as Diwali and Durga Puja in a bid to acquire customers from competitor banks.

You should do due diligence and use comparative insights in order to select the right loan product for yourself. Look for the product with the most favorable tenure and without any hidden charges. Visit the online platform of Afinoz.com to get a quick comparison of attractive offers with the best personal loan interest rates. This will help you a great deal in making an informed decision.

4. Avoid multiple loan applications

Do not submit simultaneous loan applications to different banks as it may impact your credit score negatively. A low credit score may hamper your prospects of getting the lowest personal loan interest rates.

Make it a practice to keep a certain amount of time gap between two subsequent loan applications. As a usual practice, most banks like icici personal loan deny loans to borrowers who have availed an unsecured loan inside the previous 6 months. Applying for another unsecured personal loan within such a short time frame gives the lender the impression that the borrower may not be in a position to withstand the burden of these additional EMI payments. Even if they grant a personal loan to the borrower, the same may come with stringent conditions such as hefty personal loan interest rates.

5. Make your income easily verifiable to the lender

We recommend the below-mentioned points in this regard:

  1. Provide the bank as many documents as possible related to your income proof. Income Tax returns, form 16, salary slip and bank statements are the documents required for an icici personal loan while deciding the personal loan interest rates for you.
  2. After the bank verifies your documents to be alright, it is more likely to offer you cheaper personal loan interest rates, than what you were offered before. Hence, wait till the icici personal loan comes back to you after screening your income documents.
  3. Peruse the draft loan agreement carefully to check for any hidden clauses/charges attached to your personal loan interest rates. If required, check for expert advice from someone you can trust before making the all-important decision regarding the icici personal loan.
  4. Calculate your possible EMI outflow every month (including the personal loan interest rates) with the personal loan EMI calculator at Afinoz.com.

Some important points to consider while looking for a loan with reduced personal loan interest rates

  • Processing fees- It’s normal for most lenders to charge a processing fee up to 2% of your loan amount. Please note that, since personal loans like icici personal loans are mostly short tenure loans, having a higher processing fee can lead to a significantly higher cost on your loan. Therefore, while comparing offers with reduced personal loan interest rates, you should look for offers that come with lower fees associated.
  • Prepayment and foreclosure charge- It does not make sense to continue paying personal loan interest rates if you can repay the loan earlier. If you want to pay your entire loan amount before time, it is called foreclosure and if you want to repay just a part of the loan amount, it is called a part prepayment. You would do well to have a check whether your low-interest personal loan comes with higher prepayment and foreclosure charges.
  • Customer service- While looking for the reduced personal loan interest rates, you should keep in mind that your prospective lender should have a good reputation related to its customer service. You should also gather information such as how prompt the lender is when it comes to disbursing of loans and providing other related assistance.
  • Insurance premium- Banks such as icici personal loans often ask borrowers to opt for an insurance policy along with their personal loans. Therefore, you should check your loan sanction letter thoroughly to assess the premium and the coverage of the policy. You may even decide not to go for any add-on insurance while availing the reduced personal loan interest rates from your lender.