There’s no way to know when a financial crisis will hit you. It can be a medical emergency at home or a trip going out of budget midway or a sudden donation request from your child’s school. Even though you can pull open your liquid cash reserve and salvage the situation, it is not a wise thing to do. Especially if it’s a huge amount that could burn through the entire stash. It is situations like these when you need a safer alternative, one where you call the shots without dreading about the future.
Say hi to an instant personal loan that you can procure in a matter of a few minutes and with minimal documentation. The modern consumer finances market in India has become simpler and cost-effective lately. It has made procuring, managing, and paying back personal loans easier. In some cases, it is even rewarding where paying the easy monthly instalments (EMI) on time becomes rewarding for you.
But before we dig into the details, let’s first understand why a personal loan makes more sense than the alternatives during times of financial crisis.
Why Should You Get a Personal Loan? (H2)
There are various reasons why you would want to get a personal loan for your emergency financial needs over alternatives. One of the main ones is that it acts as a quick surplus of money inflow that you can pay back through EMIs or as a one-shot payment (provided there’s no prepayment conditions). There is also no severe analysis before disbursement unlike how it is for home loans where the property and associated documents are thoroughly audited.
With availability of instant personal loans at your fingertips (through mobile apps), it has become more convenient to request one. The extremely low processing time also makes it an attractive option for users with a financial emergency.
However, one concern that users have about instant personal loans is the high interest rate. The rate of interest is usually on the higher side when compared with other types of loans.
But instead of it being acting as a deterrent, you can choose several ways to find a lower interest rate personal loan. Here’s how.
Various Ways to Get a Low Interest Rate (H2)
The following are some of the smartest ways to ensure that the instant personal loan you are procuring comes with the lowest interest rate:
A Good Credit Score
It is no secret that you can get a lower personal loan interest rate if you have a better credit score. There is no way to ensure a perfect score but there are things that you can do to improve your score (according to CIBIL):
- Paying your loan and credit dues on time
- Maintaining a mix of secured (home loan) and unsecured loans (credit card)
- Avoiding excessive use of credit (multiple loans and multiple credit cards)
Spotless Repayment History
As noted above, paying your credit dues on time is a great way to ensure that your credit score improves or remains stable.
Compare between lenders to see which one provides the lowest personal loan interest rates. If you have borrowed from a particular lender before, there’s a high chance you may get a better deal from them for your second loan.
During festivals like Diwali and Dassehra, lenders run offer periods where you can get a personal loan for a lower interest rate. Opting in during such offer periods can get you a good deal.
What job you have, how much you earn, and your professional history has some influence on the personal loan interest rates that you are offered. If not, it definitely gives you some leverage to negotiate with your agent and get a good deal.
You can choose personal loan apps like Dhani, which provides loans to everyone regardless of their qualifications. It is a one-of-a-kind personal finance app that provides instant personal loans at a competitive interest rate (among other services) to take care of your urgent financial needs. It is a revolutionary new offering by Indiabulls Consumer Finance that is bound to simplify the way you get a personal loan.
All in all, interest rates on personal loans are fairly negotiable. Maintaining your credit score and comparing between lenders are a must-do activity when it comes to finding the best deal.