The financial environment of the country is somewhat volatile and it’s increasingly becoming dingy with the passage of time. Today, low fund situations are very common and create an atmosphere of distress amongst individuals due to exorbitant interest rates and charges.
An instant personal loan is repaid by the individual through EMIs and interest rates levied on it. Personal loan being unsecure imposes high interest amount. However, when you’re applying for a personal loan, some pointers must be kept in mind!
What you must remember that a higher EMI attracts higher interest. All individuals are not offered similar interest rates; this is coarsely dependent on multiple factors. All these factors determine the loan issuing company/financial institution/bank. The following factors are supposedly the most important to affect your interest rates:
- CIBIL score: The Credit Information Bureau (India) Limited score is basically a 3-digit report of your past financial transactions. Whenever a candidate applies for a personal loan, an extensive research goes into knowing CIBIL performance of the person. This is essentially done to lower the risk of default and ensure timely EMI payments. A high credit score will marginally reduce the loan interest amount. Financial institutions are looking at a credit score of 800 or more for serious consideration.
- Repute of your current organization:If you had been and still are attached to a reputed organization, then your chances for an instant personal loan are higher. A good organization is responsible to provide assurance of high stability and continuity. Therefore, individuals eventually become more potential for loan packages. Also, in return repayments become super quick!
- Personal income: Your eligibility as a borrower is fully dependent on what you earn. Your personal income makes more impact than any other factor. Being unsecure, personal loans have no collaterals at risk. A meaty income can invariably pay back well in time, keeping the return cost effective and easy. This is one of the reasons why personal loans were closely tied to minimum salary norms proposed by banks. Lending institutions are also free to cancel applications, in case they don’t meet the required conditions.
- Relationship with the bank: Banks or financial institutions prefer to have friendly relationship with their customers for sustainability. These individuals get you hefty personal interest amounts. If you have been long related to a particular bank, then it’s all the easier. This will also enable banks to retain you as permanent customers and not lose this easy. Such a mutual relationship is advantageous in the longer run.
Whenever next you apply for a personal loan, ensure all conditions are met with to attract a competitive interest rate.