Personal loan interest rates may vary according to individual financial and other conditions. Get an idea about these factors to have a better chance of getting the best personal loan rate.
Hello and welcome to FundooMoney, your 24X7 buddy for all your money matters. Many of us are aware of the high interest rates associated with personal loans when compared to other loans. However, the personal loan interest rates may vary according to individual conditions. What are they? We tell you all about them but in just a little while.
In case of personal loans, lenders look for various comfort factors in the borrowers’ profile. It is based on these comfort factors that they offer their best rate to the preferred borrower. Here are the factors that influence the personal loan rate and help you get the best rate for a personal loan.
Life stage If you are single and in an entry level job, chances are that the lenders may find your profile risky and may not offer you the best interest rate. Typically lenders prefer borrowers who are financially well-settled, married and have a family.
Nature of job or profession If you working for a big or reputed organisation like a large private sector company or a large multinational company (MNC) or public sector unit (PSU), lenders may view your personal loan application more favourably and may make you eligible for a better personal loan interest rate.
Lending institutions also have a greater preference for established professionals like chartered accountants (CA), doctors and architects. They may offer customised personal loans at their best rate.
Income stability Prospects of continuity and stability of income is always preferred by the lenders. In most cases, they look for at least 3 years of stable income without any disruption. However, if you are in a senior or top management role, many lenders may offer you a personal loan without scrutinising stability of recent earnings.
Credit history If you have any default in past on the repayment of credit card outstanding balance or a loan, it may affect your credit score adversely. Credit score arrived at by credit rating agencies is a critical input for lending institutions. A lower score may impact access to a personal loan, the loan amount and the personal loan rate. On the other hand a good repayment track record and high credit score could make your case stronger for a bargain interest rate for a personal loan.
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