How To Get the Best Personal Loan Interest Rates

How To Get the Best Personal Loan Interest Rates

  • General

Interest rates on personal loans from major lenders typically start at 10.49% p.a. Since public sector banks offer lower interest rates, these banks usually offer the lowest interest rates on personal loans. The loan rates offered by a lender depending on the applicant’s credit history, monthly income, professional profile, etc. To choose the most suitable personal loan offer, you should compare the personal loan rates. Interest rates are offered by as many lenders as possible.

EMI Personal Loan Calculator

Use the EMI Personal Loan Calculator from TVS Credit to find out how much EMI you would pay over the life of the loan at different interest rates and loan terms. The online loan calculator also works as an interest calculator as it helps you calculate the total interest that will be payable on your personal loan.

Fixed Interest Rates

A fixed interest rate personal loan means that the interest rate offered remains fixed and does not fluctuate throughout the life of the loan. Fixed interest rates are comparatively higher than variable interest rates. It also describes the certainty of the exact loan EMI that you must pay upfront over the life of the loan.

Benefits of Fixed Interest Rates for Personal Loans

  • The interest rate remains constant throughout the term of the loan, regardless of changes in the interest rate regime
  • The EMI of the loan does not change, providing certainty in liquidity management and budgeting
  • Interest-rate personal loans will be beneficial during a rising interest-rate regime

Floating Interest Rates

Floating Interest Rate Personal Loans generally mean that the interest rate can change over the life of the loan due to borrowing rates. If you choose an adjustable-rate personal loan, be prepared for interest rate changes during the life of the loan.

Benefits of Floating Interest Rate for Personal Loans

  • Interest rates are comparatively lower compared to fixed interest rates
  • Having personal loans at variable interest rates would be beneficial during a falling interest rate regime
  • Borrowers would save money due to falling interest costs and would also benefit from falling PMI during a falling interest rate regime.
  • Saves you the prepayment fees associated with your personal loan prepayment or foreclosure

Tips for getting a Personal Loan at a Minimum Interest Rate

Here are some important things to keep in mind when getting a low-rate personal loan:

  • Build and maintain a minimum credit score of 750 or higher
  • Consult Banks/NBFCs where you already have a deposit and/or loan accounts
  • Track interest rate rebates offered by lenders during the holiday season
  • Visit online financial markets to review and compare personal loan offers from different lenders

Factors Influencing Personal Loan Interest Rates

Credit score: A higher credit score may qualify you for a lower interest rate.

Debt-to-income ratio: A lower debt-to-income ratio may make you a more attractive borrower to lenders and may qualify you for a lower interest rate.

Loan term: A shorter loan term may come with a lower interest rate.

Type of lender: Different types of lenders, such as banks, credit unions, and online lenders, may offer different interest rates.

Collateral: A secured loan, where you put collateral up as security for the loan, may have a lower interest rate than an unsecured loan.

Economic conditions: Interest rates may be influenced by broader economic conditions, such as the Federal Reserve's monetary policy.

It's important to shop around and compare rates from multiple lenders to find the best deal on a personal loan. Download the TVS Credit Sathi App to get easy personal loans from TVS Credit.

Top personal loan benefits

Hassle-Free Documentation

One of the most significant benefits of a personal loan is minimal documentation. In the case of an online application, the documentation is digital. You can upload the required documents together with your application form. The process is entirely electronic.

Some lenders like TVS Credit also offer a door-to-door document collection service. For the process, banks and financial institutions require that you provide proof of age, address, bank account details, payslips, income tax returns, credit history, etc.

Fast Pay-out

Paying off a home loan takes about 3-4 weeks. In contrast, a personal loan only takes 24 to 72 hours. Hence, they are the best financial product to meet urgent payment or cash needs. However, you must meet the eligibility criteria and have good credit for your loan to be disbursed quickly.

No Collateral Required

Personal loans are unsecured loans. You are, therefore, not required to provide any security for any default or non-payment by you of any charges. This characteristic of personal loans makes them accessible to anyone with a steady source of income and a good credit history will help you with debt consolidation

Another key benefit of personal loans is their ability to pay off debt. If you have debt, such as secured loans or high-yield credit cards, you can use a personal loan to pay off payments and eliminate liabilities from your portfolio. Personal loan interest rates are lower than credit card rates. Therefore, you can also pay off high-interest debts with a low-interest financial product.

Versatility

When it comes to utilizing a loan, nothing beats personal loans. Banks and lenders do not impose any limitations or restrictions on end use. This is one of the most beneficial facets of a personal loan. You can use the borrowed money to plan your dream vacation, pay off other debts, buy luxury gadgets and accessories, or celebrate a big wedding. Personal loans also help cover medical expenses in emergencies.

Build Credit Score

Affordable personal loans are a great way to improve your credit score, especially if you are new to credit or have a low credit score. You can take advantage of these at attractive interest rates and repay them with a flexible loan term. Because you pay your EMI and interest on time, your credit score continues to improve

But remember to take out a loan within your ability to pay. Failure to pay the EMI on the loan and you lose EMI can negatively affect your credit score.

Flexible Term

One of the advantages of personal loans that attract borrowers is a flexible repayment schedule. The term starts at 12 months and can be up to 7 years.

Therefore, you can choose an investment that suits your finances and needs and allows you to optimize your monthly expenses according to your needs. A longer hold means lower EMI.

Attractive interest rates

Personal loans are available at competitive interest rates. As a result, you can enjoy affordable EMI. The interest rate is usually fixed. Your EMIs are also fixed for the life of the loan, and you don't have to worry about changing interest rates.

Tax advantages

Depending on how the funds are used, you can claim tax allowances for your private loan.

For example, if you are using the loan to renovate or build a house, or to make a down payment on a house, you are entitled to a Section 24B tax deduction of up to Rs 2 lakhs for interest paid during a financial year. However, other use cases are subject to additional terms and conditions. Submit the required documents to understand how you can enjoy tax benefits on your personal loans.

Personal loans are in high demand these days. Before you decide on a personal loan, make sure that the amount used matches your payment capability. Please also read all General Terms and Conditions carefully. Many lenders, financial technology companies like TVS Credit, and banks offer personal loans.

Now that you are well-informed on all the aspects of a Personal Loan. So wait no more and click here to know more about TVS Credit Digital Personal Loan and choose the option that suits you the best.

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