Five Tips To Get The Cheapest Personal Loan

  Author: Naveen Kumar

Whether it is emergencies, festival season or major family events like marriages, people reach out for personal loans. Since these loans are not backed by any collateral, they come with high interest rates. In this backdrop, how do you get the cheapest personal loan? When you are scouting around for a personal loan, hunt for bargains on interest rate and fees. Here are five essential steps for you to have the cheapest personal loan.

Do your research You can do online research to find the personal loan interest rates of various lenders by checking out their websites. You can also visit the sites of web aggregators who deal with online loans. They will provide comparisons of interest rates of personal loans from many lenders at one place and even help you by providing personal loan calculators.

Select 5 lenders with lowest base rate Shortlist five lenders who are providing the lowest personal loan interest rates. Typically, large public sector banks offer the lowest rates. However, some private players also offer very competitive personal loan rates. Just in case you don’t get the exact interest rate for a lender’s personal loan, you may use lenders’ base rate. The loan rate would be based on it. Select the lenders with lowest base rate.

Find the right lender Different lending institutions such as banks, target different customer segments. Some target salaried people working in the private sector, while some look for government employees, even as others prefer professionals, self-employed and businessmen. Study the eligibility criteria and various personal loan schemes offered by shortlisted personal loan providers. Based on the match of their personal loan offering and your profile, select a suitable personal loan provider.

Bargain for a lower interest rate Lending institutions like banks generally offer the rack rate at the time of loan application. So, there may be some scope of bargaining in the interest rate to be charged. Check your credit score before applying for the loan. If you have good credit score and suitable profile, bargain hard for some discount on the interest rate.

Seek a discount on the processing fee You can take advantage of a good credit history i.e. influenced by your loan repayment track-record, and suitable profile, say, you being a salaried individual working in a prominent company, by seeking discount on the processing fee.

A personal loan is useful and the only option to meet a sudden requirement for cash. These five steps will help you zero down on the cheapest personal loan available and make repaying the loan that much easier.