Chennai, the capital city of Tamil Nadu, is the cultural, economic and educational fulcrum of South India. This city and its surroundings hold the industrial base in the automobile, technology, hardware manufacturing and medical sectors.
Individuals hailing from this city can mitigate their financial requirements by taking the assistance of an instant personal loan in Chennai. It is one of the most sought after credit instruments, owing to its no-end use restrictions and prompt approval, to name a few.
However, a borrower considering this loan option must factor in the interest rate as it is a significant determinant of the affordability of the borrowing.
Know how to get a personal loan in Chennai at low-interest rates
The cost of borrowing depends mainly on the interest rate one has opted for. Hence, borrowers must know ways they can reduce the applicable interest rate on this financial product.
- Maintaining a good CIBIL score
CIBIL full form can be expanded to Credit Information Bureau (India) Limited. The score assigned by this credit rating agency determines a borrower’s financial behaviour. An individual with a CIBIL score of 750 and above will be offered a competitive interest rate as lenders consider them reliable and low-risk borrowers.
On the other hand, an individual with a subpar CIBIL score will be charged a higher interest rate. It suggests they are not responsible borrowers, who have not managed their previous credits well enough, and may have defaulted in repayment. In such cases, the interest rate charged by financial institutions on personal loans is not competitive.
Besides knowing what is CIBIL score, borrowers must be well aware of how to improve their CIBIL score before applying for a personal loan.
- Compare different lenders
The interest rate charged by financial institutions differs from one lender to another. Therefore, individuals must conduct thorough research and settle for a lender offering a competitive interest rate and best deals on this credit instrument.
Besides the interest rate, individuals must compare loan terms and conditions to avoid ending up in a financial mess. Thus, knowledge regarding how to choose the right personal loan lender will help one take a prudent borrowing decision.
- Maintain a decent repayment history
Borrowers must make sure that they clear off their debts every month and pay their monthly instalments on time. This practice will help a borrower get better loan deals, make one reliable in the eyes of the lender and enhance the chance of negotiating with lenders to offer reasonable interest rates.
- Choose a suitable loan tenor
Choosing a loan tenor also affects the interest rate, but not directly. Opting for a shorter loan tenor reduces the overall interest outgo, making the borrowing cost-effective. In this regard, one can use a personal EMI calculator to calculate EMIs for different loan tenors and settle for a suitable one. Opting for an extended time frame will lower a borrower’s EMI burden; however, interest outgo will increase.
Hence, it is important that borrowers find the right personal loan tenor that works for them.
- Employment stability plays a part
Borrowers’ employment status and maintaining a decent FOIR (Fixed Obligation to Income Ratio) affects the interest rate. An individual working in a reputed MNC or public/ private company with stable earnings are considered as a reliable borrower. Thus, they get a chance to negotiate a better interest rate. Hence, borrowers must know how much personal loan one can get on their salary.
- Not meeting the eligibility parameters
Furthermore, individuals availing of an instant personal loan in Chennai must check the eligibility parameters set by lending institutions to qualify as a borrower. Not meeting these criteria will lead to rejection of loan application, or lenders will sanction the loan principal against a higher interest rate.
Thus, borrowers who meet these parameters without any hiccups can negotiate a favorable interest rate.
Besides finding competitive interest rates, existing customers can additionally reap the benefits of the pre-approved offers extended by leading financial institutions. Reputed lenders like Bajaj Finserv extend exclusive pre-approved offers on various financial products like personal loans, business loans, credit cards, etc. These offers expedite the lending process and save time. Intending borrowers can check their pre-approved offers by entering their names and contact details.
To sum up, availing of a low-interest personal loan is an ideal way to manage financial obligations. Hence, individuals seeking the assistance of a personal loan in Chennai must lookout for a competitive rate as that will make the repayment easy and secure their financial well-being in the long run.