The cost of living in India has greatly increased in the last few years. Thus, it has become extremely difficult for people to manage their financial budget wisely. Further, due to the increasing inflation rates in the past few years, the costs of living have sky-rocketed. Thus, at such times if there is a medical or a financial emergency we are left with no other choice but to request capital assistance from friends and family.
However, thanks to the availability of monetary assistance via new-age banks and NBFCs (Non-Banking Financial Companies), we can easily borrow capital without losing face in front of friends and family. Also, these new-age financial institutions provide low interest personal loans as compared to traditional financiers. Other than that, the various other benefits of opting for an instant loan in India are:
1. Zero-Collateral personal loans
When applying for an instant loan, one of our biggest worries is whether we would be able to provide the required collateral; however, financial institutions now provide collateral-free low interest personal loans. Thus, we can easily borrow capital without having to worry about submitting the required collateral.
2. Flexibility of usage
You can use an unsecured instant loan for any of your personal or business loans in India; you can consolidate debt, pay your credit card bills, buy a new electronic device, fund your holiday plans, expand your business, etc. After all, there are no restrictions whatsoever on the usage of a personal loan amount in India.
3. Flexible repayment tenure
One of the biggest benefits of opting for an instant loan in India is that you get access to flexible repayment tenure. Thus, you can easily borrow the required capital and repay the loan amount over a set time. Further, the new-age financial institutions also provide you with online tools such as EMI calculators, financial blogs, etc. Thus, you can use an EMI calculator to calculate your personal loan interest rates based on your principal amount and repayment tenure. Further, an EMI calculator also helps you plan your future repayments so that you never default on any of your instalments.
4. Quick disbursal
The days are gone when we would have to carry loads of documents and make multiple visits to financial institutions to be able to apply for a personal loan. After all, thanks to the digitalization of banks and NBFCs (Non-banking Financial Companies) we can now enjoy paperless documentation from the comfort of our homes or office. Thus, not only saving us from physical exhaustion but also from the loss of time that we would have otherwise faced by making physical visits to financial institutions’ offices. Because of this digitalization, the overall process of personal loan processing and disbursal has become extremely quick.
However, while we are applying for an instant loan, one of our biggest worries is regarding the personal loan interest rates that we would have to pay along with the principal amount. Thus, we have researched and found a few ways through which you can obtain low interest personal loans in India, and they are:
A. Compare online
To find the lowest personal loan interest rates in India, the first thing that we would have to do is compare online. After all, by doing so, you can not only find the best financial institution in the market but also the loan product with the lowest personal loan interest rates. You can easily compare online by visiting the financial institution of your choice or via affiliate websites. Further, the new-age banks and NBFCs (Non-banking financial Companies) also provide you with an online EMI calculator that you can use to find low interest personal loans based on your principal amount and repayment tenure.
B. Work on your credit profile
As discussed earlier, a personal loan is an unsecured form of financial assistance; thus, the new-age banks and NBFCs (Non-banking Financial Companies) scrutinize your credit profile to determine your creditworthiness. Further, if you are deemed to be financially responsible by the banks and NBFCs (Non-Banking Financial Companies), then you get access to the loan amount. You can easily build a good credit profile by timely repaying your loan amount. Further, you can also build a good mix of credit profiles by opting for a long-term loan product, a short-term loan product, and 2 credit cards. However, when you are using a credit card, ensure that you maintain a credit utilization ratio below 30% of the overall credit amount.
C. Build your credit score
When applying for an instant loan, one of the most crucial factors that determine your personal loan interest rates is your credit score. A credit score is a 3-digit numerical figure given out by the credit rating bureaus and is based on your repayment history, credit profile, etc. Further, CIBIL is one of the leading credit rating bureaus in India, and the range of CIBIL scores is between 300 and 900. Also, the higher your CIBIL score, the better your chances of obtaining low interest personal loans in India. Thus, you must ensure to build your credit score and periodically check your CIBIL score over a course of time.
D. Alternate source of income
At the end of the day, every existing company wants to earn a profit, and a financial institution is no different. Thus, when sanctioning your loan amount, the new-age banks and NBFCs (Non-banking Financial Companies) thoroughly check your source of income. After all, if you are not financially capable of making timely repayments, then the banks and NBFCs (Non-banking Financial Companies) will end up losing a truckload of money. Thus, your source of income plays an important role in determining your loan eligibility. Further, you can also obtain low interest personal loans by creating an alternate source of income. This alternate source of income can be the rent from your second property or the income of your spouse.
Hope you enjoyed reading this article regarding the various factors that determine your personal loan interest rates in India!