3 things you can do to get personal loan at the lowest interest rate | Mint

A personal loan can solve a range of money-related problems – at least temporarily. Whether you are facing a need of money for an emergency or some requirement to buy a luxury, a personal loan may come handy. Whether it to organise a wedding, or to buy an expensive gift, it does not harm to apply for a personal loan.

Now, another pertinent thing that a personal loan applicant must strive for is to procure the loan at the lowest interest rate possible. A small difference in the rate of interest can add to a huge interest burden in the long run.

So, let us explore different ways to get personal loan at lowest rate as possible:

Three things one can do to get personal loan at lowest rate possible:

1. Improve credit score: One of the key considerations which can sway the deal in one direction or the other is a high credit score. If your credit score is not too impressive, you are advised to make a conscious attempt to improve your score. Else, if there is an error in your credit report, you are meant to get it rectified by reaching out to the credit rating bureau.

2. Apply instead of a pre-approved offer on credit card: Another way to arrange loan at a low interest rate is to undergo the rigour of applying for a personal loan instead of accepting a pre-approved loan offer on your credit card. At times, most lenders extend these pre-approved offers to their old customers.

These loans – although quite convenient to avail – are offered at a high rate of interest. On the other hand, when you approach your bank and make an application, the interest rate is calibrated based on your latest credit score and overall application – which may be lower than that on a pre-approved offer.

3. Employer’s reputation: One more factor that can go into determining your loan application including the interest rate at which it is offered is the reputation of your employer. If you work with a respectable company, the chances are that you will be able to grab a good personal loan deal. 

And if you are self-employed or work with a smaller organisation, lenders would be more wary to give an unsecured loan to you.

(Note: Raising a loan comes with its set of risks. So, due caution is advised)