Opting for Instant Personal Loan Know How to Get Better Interest Rate

A personal loan is a quick solution to raise money when there is a cash crunch or immediate need for funds. Although personal loan attracts a higher rate of interest (RoI), there is no doubt that it can be a saviour during desperate times.  A rainy day, a medical emergency or lack of funds for servicing personal reasons, such as your child’s education or home renovation, may call for a personal loan.
 
In such cases, a little preparedness can go a long way in getting a fair interest rate, conducive for you to repay.
 
The following pointers will guide you on how you can bag personal emergency loan on a fair rate:

Maintain Good Credit Score

Maintaining a good credit score is the foremost thing, every individual must do to maintain good financial hygiene. A good credit score, stable income and a healthy financial and employment history always upgrades your position to negotiate with lenders. It reduces your risk quotient and makes you a lucrative prospect for them. You never know when you might require a personal loan for medical emergencies or other needs. Hence, bear in mind to take steps to maintain a healthy score.
 
ALSO READ: Availing Personal Loans Just Became Super Easy with Digital Lending

Compare Different Types of Loans 

Do not miss on comparing different types of loans if you want favourable terms. Wondering how to compare these loans? Check the following parameters:

Check Interest Calculation Method

Use comparison platforms for checking the current interest rates being offered by various lending institutions. Interest may be fixed or floating. With a fixed RoI, you will be paying a fixed sum of money, irrespective of the market fluctuations. On the other hand, in case of fluctuating rate, the lending institution will modify the interest amount as per the market condition. The EMI may differ accordingly atregular intervals. Opt for this type of loan if the market conditions are favourable and the RoI is expected to be quite low. However, bear in mind that it will carry an element of risk. 

ALSO READ: The Rise Of The Instant Personal Loan

Type of Applicant 

• RoI will also differ as per the applicant. Some institutions offer preferential RoI for women and pensioners.
• Ensure to check with your lender if you fall into the category of applicants who can avail a lower interest rate.

Check for Discounts and Seasonal Offers 

• Make sure you do some homework for checking seasonal offers. Many lenders announce discounts during festival season or holidays. This can be the right opportunity to bag a lower interest rate.

Opt for Known Lender 

• Lenders often prefer applicants who have had a relationship with them as they are aware of your financial history. You should consider the financial institution with which you have a savings or current account, as it will give you a higher ability to negotiate for a better rate.-

Put Up Collateral 

The formula is simple. The higher the risk, the greater the interest amount. When you put up collateral, you reduce the risk of non-repayment, which gives you an ability to get a lower interest rate when compared to an unsecured loan.

Reduce Loan Term 

If you can repay a higher EMI, opt for a lesser loan term. This will automatically reduce your interest rate.

Avoid Applying to Multiple Lenders 

Applying to multiple lenders will affect your credit score, automatically reducing your chances of getting approval for a loan. With each inquiry, your credit score drops by a few points. In such instances, you might be required to settle for a higher RoI as you are temporarily termed as a risky applicant.
Thus, shopping for the best deal with require some smart work. This is where online marketplaces for comparison come handy. Choose your lender based on interest rates, loan terms, tenure, eligibility, etc. However, apply to the one that is most suitable for you.

ALSO READ: Points To Consider Before Taking A Loan

To Conclude

for an instant loan in lockdown, online applications are the best way to proceed in this global pandemic situation.  Make sure you follow the above guidelines while applying for emergency personal loans. All the best!