Personal Loans With Low Interest Rates For Good Credit – Before taking out a personal loan, compare interest rates and other factors. low speed will help you significantly reduce EMI in high speed mode
For a long time, New Delhi-based software professional Nibedita Sharma dreamed of renovating her house. Her only obstacle was money. There were always expenses that needed immediate attention, putting renovations on the back burner. Until she noticed a leak through the ceiling and she couldn’t put off the renovation any longer. Nervous Sharma (40) has decided to take out a personal loan. To her pleasant surprise, many banks, non-bank finance companies (NBFCs) and fintech companies lined up to offer her a loan within seconds. All he had to do was click a few buttons and the money was credited to his account. “My good credit score and long relationship with the bank helped me get an 11% [interest] personal loan in minutes. I will pay monthly EMI (equal monthly installments) over a two-year period,” he says.
Personal Loans With Low Interest Rates For Good Credit
Like Sharma, many Indians are fascinated by the ease of access to personal loans. Access to funds is no longer limited to people who live in metropolitan areas or have good credit scores. With fintech companies crowding the space, even people with low or no credit scores now have a better chance of getting a personal loan.
Best Personal Loans Of April 2023
Although personal loans are easily available, how to get them cheap? Look for the lowest rates and opt for a fixed rate loan because interest rates are rising. The lower the rate, the lower your EMI. There are many factors that lenders take into consideration, including your credit score and loan profile.
There are several avenues that offer personal loans. While some charge you low interest rates, others offer flexible repayment options. Choose the one that best suits you. Banks offer personal loans with the lowest interest rates if you have a good credit score. A long and lasting relationship with the bank makes it even easier. In case of a pre-approved loan, you don’t even need documents. The only drawback is the lack of flexibility. Banks generally do not allow partial prepayments.
NBFCs can be your other option. “NBFCs have been active advocates of using technology in lending and thus offer speed along with convenience, making it their biggest USP. The offers for loan amount, interest rate and term are as competitive as banks and are adjusted to the customer’s risk profile. Another big plus is the flexible repayment options and fully transparent fees,” says Manish Chaudhari, President and Chief Personnel Officer, Poonawalla Fincorp, a Pune-based NBFC. Some of the popular names include Bajaj Finserv and Home Credit, among the others.
Another option is fintech companies like Navi Finserv and LoanTap. They are popular with millennials and the self-employed due to their less stringent eligibility criteria. But there are also disadvantages. “Not everyone is technically literate. Not everyone has a smartphone. And it can be addictive,” says Mel Gerard Carvill, non-executive director and board member of Home Credit N.V., a global provider of consumer credit services.
Get Fixed Interest Rates On Loan For 5 Years Deals Of Loan
The growing demand for personal loans is reflected in the recent CMIE Economic Outlook report. Personal loans outstanding between December 2021 and March 2022 increased between 2.4 and 4 percent, he said. As the economy has emerged from the shadow of Covid-19, the demand for loans is on the rise. CMIE says the recovery in bank loan demand started from the second half of FY22, which according to analysts looks set to continue into FY23.
Among the various types of personal loans, the increase in spending on credit cards, home loans, auto loans, loans for durable goods and other personal loans contributed to the growth. Together, they account for more than 90% of outstanding personal loans, which increased by Rs 57,165 crore per month in April 2022. However, the monthly growth hit a five-month low of 1.7% thanks to the high inflation weighing on consumer demand. This figure could come under further pressure as the Reserve Bank of India (RBI) raised its repo rate twice in just 36 days to 4.9%. While personal loans are on the rise, is it a good time to get into it? Here are some factors you should consider.
In this scenario of rising interest rates, before applying for a personal loan, it is important to compare the interest rates offered by lenders, as the lowest rate will reduce your EMI. Your credit score is also directly related to your interest rate. Also, credit score is the only factor in the borrower’s control that has an impact on interest rates.
A credit score is a three-digit number assigned to an individual on a scale of 300 to 900 points. It is based on the unique algorithm of each office; a score of 750 or higher is considered good. “To get a cheap personal loan, make sure you have a good credit score because a bad score would mean higher interest rates… If you have a credit score above 750, your chances of getting a personal loan increase dramatically.” significant,” says Satyam Kumar, CEO and co-founder of LoanTap, a fintech company for online delivery of retail products. Another factor that determines the price of your loan is your profile. Your income level and occupation also have an impact on interest rates.
Why You Should Apply For A Personal Loan Before Interest Rates Rise
Low interest rates should certainly be the main criterion when choosing a personal loan. Experts say opting for fixed rate personal loans would always be preferable during a regime of rising interest rates. “Those who have taken advantage of personal loans with variable interest rates would have been impacted by rising repo rates,” says Sahil Arora, senior director at Paisabazaar, a fintech firm.
Arora adds that public sector banks (PSBs) usually offer personal loans at variable interest rates, while most private banks offer personal loans at fixed interest rates. Also, one should opt for banks with good CASA ratios as such lenders tend to increase their rates at a slower pace than banks with low ratios. HOME is the ratio of current and savings account deposits to total bank deposits.
There are other variables to consider, such as processing fees, attorney fees, penalties, and even prepayment fees. Similarly, personal loan borrowers should confirm that the interest rate, processing fees, term, prepayment, foreclosure costs, and other personal loan features written into the personal loan agreement are the same as those communicated during the registration process, so that there are no surprises after taking out the loan.
Before taking out a personal loan, explore other options available on the market. For example, if you want to take out a personal loan for furniture or electrical equipment, a better deal might be to take advantage of the free EMIs offered by many stores for six to 12 months. Therefore, be patient and compare all offers from all available lenders before making a decision.
How Do Personal Loans Work?
It is very important to get a personal loan from RBI regulated sources and not from unscrupulous lenders who charge you astronomical interest rates and harass you if you default. “As a consumer, you need to be aware of the remedies provided by industry regulators. Like in this case, the RBI, so you can escalate it to the authorities,” says LoanTap’s Kumar.
Historically, in emergencies, people borrowed money from close friends and family or local money lenders. With the rise of fintech applications, you can now get loans from all kinds of sources. However, be careful when opting for these. “These are all new sources and regulators have been a little slow to get them all in line. The argument I always make is that if you are taking out a loan, or putting a deposit down, or buying an insurance policy, you shouldn’t worry who the supplier is, you shouldn’t think I’m at a higher risk because I got it from supplier A and not supplier B. The regulation should be about the product, not the supplier. So, as a consumer, I should have equal protection “says Carvill.
Sharma has closed the cap that he loses by opting for loans from regulated sources. With loans flowing like water, don’t be lured by easy money; choose the right financing option and realize your dream like her. A personal loan can be used for almost anything. Some lenders may ask you what you intend to do with the money, while others will just want to make sure you have a chance to pay it back. A personal loan isn’t cheap, but it can be a viable option in a variety of circumstances. Here’s how to decide if one is right for you.
A personal loan is usually an unsecured loan, which means the lender doesn’t need collateral, such as a house or car, to lend the money. However, with unsecured loans, the lender takes on more risk and will most likely charge a higher interest rate