Jul 24, 2020 ●6 min read
Factors Which Affect Your Personal Loan Interest Rate
Personal loans, unlike home and car loans, are unsecured loans that are easy to avail. Cheap personal loans can come in handy in several situations like medical emergencies, house repair, and higher education. Though these loans can be easily availed, they usually have a higher rate of interest than secured loans. Also, the rate of interest varies widely from lender to lender. The same lender can offer similar loans to different borrowers at different rates of interest. This disparity is due to many factors. In case you are planning to apply for a personal loan in Nagpur, or elsewhere, you must be wondering what can be done to get cheap personal loans at an affordable rate of interest. In this blog, let’s go through a few factors that decide the rate of interest that you have to pay on personal loans. Your income Lenders always prefer offering personal loans to applicants with higher income to the ones with lower income. The more the income; the more are the chances of timely repayment of the loan. With personal loans being unsecured, the lender needs to trust the borrower. An income above the risk limit provides a firm base for this trust to grow upon. Credit score and Repayment history The credit score of the borrower is one of the first things that the lender checks before approving any loans. Your credit score reflects your credibility. A good credit score implies that you have timely repaid your previous loans. As personal loans are unsecured loans, lenders give much importance to this aspect. The better the credit score; the lower is the rate of interest. Usually, a credit score of 750 or above is considered to be a healthy one. On the same note, a low credit score can lead to rejection of your application. Who you work for At first glance, this criterion might seem absurd. But it is a fact that working for a reputed employer can trim the rate of interest of your personal loan. Employees of a reputed organization are considered to be stable and can be depended upon to pay EMIs in time. So, if you are a salaried employee, working for a reputed firm, and looking to apply for a personal loan in Nagpur or elsewhere, the chances are that you will secure a better deal than a self-employed individual. Your relationship with the bank Though this point might seem to be a trivial one, having a salary account or fixed deposit in the bank that you want to borrow from, can earn you some loyalty points. This helps you to secure a cheap personal loan from the bank. If you are looking to apply for a personal loan in Nagpur, Zavron Finance Private Limited offers personal loans at low rates of interest. Besides, the processing of your personal loan takes just a few minutes if you are eligible. They accept multiple modes of repayment, and the transaction involves no hidden clauses or charges. For more information on Zavron’s cheap personal loans, visit their website.