A personal loan is a type of credit that may be used for many different purposes. This loan may be helpful to you in any situation, whether you want to plan a trip, have unpaid obligations, or are dealing with a financial or medical emergency. The fact that this loan is unsecured is another benefit. As a result, you may get it without putting up any security.

There are several financial institutions available in the market whom you can approach for an Instant personal loan. However, before applying for a personal loan, you must consider a few important elements that will help you to acquire the loan at the lowest interest rate possible.

Evaluate interest rates and other criteria before applying for a personal loan. A low rate in a rising rate environment will dramatically lower your EMIs.

This article will educate you on how to easily secure an inexpensive personal loan.

Key Factors to Remember

Here are the details about important points that will help you get the cheapest personal loan.

1. Maintain a Good Credit Score

A credit score is a three-digit number ranging between 300 and 900. It shows the creditworthiness of the borrower. A score above 750 is considered a good number and helps obtain a loan at a low-interest rate. A financial institution uses a person’s credit score to evaluate his/her credit history, financial obligations, and repaying habits. If you have procured a loan before and repaid it in a timely manner, the lender will assess you as a low-risk borrower.

2. Look for a Low-Interest Loan

Each lender offers a personal loan at different interest rates. Before making a decision, you must compare different personal loan rates. By doing so, you will be able to find a loan option at a low-interest rate. According to professionals, choosing fixed-rate personal loans are always the better option during an era of rising interest rates. Moreover, a low-interest rate will decrease the amount of your monthly EMIs.

3. Verify Market Reputation of the Lender

Examine the reputation of the financial institution before locking your decision. Choose the lender that has an excellent market reputation in terms of customer satisfaction and other services.

4. Evaluate Other Fees and Charges

In addition to interest rates, it is crucial to compare other charges associated with a personal loan, including processing fees, foreclosing charges, penalties, etc. It will give you a clear understanding, allowing you to select an option that meets your requirements.

5. Calculate the EMI Amount

Financial institutions provide a personal loan EMI calculator on their website so that customers can calculate the EMI amount. This will help you to choose the loan option with the minimum EMI value. It will also allow you to plan your expenditures wisely as you will know the precise amount that needs to be paid.

Interest Rates on Personal Loans

Each financial institution has its own applicable interest rate. Below is the table you can refer to comprehend it better.

FINANCIAL INSTITUTION	RATE OF INTEREST
Axis Bank	10.49% per annum onwards
HDFC Bank	10.5% per annum onwards
Citibank	9.99% per annum onwards
IDFC First Bank	10.49% per annum onwards
HSBC Bank	9.50% per annum onwards
Bank of Baroda	10.50% per annum onwards
Punjab National Bank	7.90% per annum onwards
State Bank of India	9.60% per annum onwards
Central Bank of India	9.85% per annum onwards
Indian Overseas Bank	9.30% per annum onwards

Disclaimer: Interest rates are subject to change as per the financial institution’s policy

At the end…

 Opting a loan is one of the most important decisions that a person makes in his/her life as it is associated with risks. Therefore, it is recommended that a person must do extensive research before finalising the lender. With the help of the above-mentioned factors, you will be able to compare and choose an inexpensive personal loan option.

Source : Moneycontrol