A Beginner’s Guide to Finding Low-Interest Personal Loans

Personal loans are one of the most widely used financial tools as they help people deal with immediate financial difficulties and manage unexpected expenses. However, personal loans also have some of the highest interest rates compared to other types of loans, so they can be quite expensive to take on. Moreover, if you have never taken a personal loan before, finding a low-interest personal loan can be quite challenging. Thus, in this article, we will take a look at some useful tips that you can use to secure a low-interest personal loan.

Understanding personal loans

Personal loans are a form of unsecured loan, meaning that they do not need any collateral. Moreover, the interest rates applicable on personal loans can depend upon a wide variety of factors such as your credit score, the bank’s internal policies, your income level, etc. Personal loan interest rates can range anywhere between 10% to 24% per annum, depending upon these factors.

Borrowers can use personal loans for any number of reasons, such as paying off debt, dealing with medical emergencies, upgrading their homes, investing in business, etc. Thus, the dynamic nature of personal loans makes it an attractive choice for borrowers.

How to find low-interest personal loans?

Here are some valuable steps that you can take to get personal loans with low interest rates:

Maintain a high credit score: If you have an excellent CIBIL score (above 750), most banks will likely offer you some of the best personal loan interest rates since you will be deemed a trustworthy borrower. If you do not have a high credit score, work towards improving your credit score by taking small loans/credit card debt and repaying the bills on time to build a high credit score.

Compare available lenders: If you are on the lookout for a low-interest personal loan, you should compare the loans offered by all available banks and financial institutions to see who is offering the lowest interest rates. When it comes to large loans, even the smallest changes in percentages can make a lot of difference. Thus, compare all available lenders to find the best possible personal loan interest that you can get.

Choose a shorter tenure: By opting for a shorter tenure, you reduce the number of months/years where you have to pay interest, ultimately helping you save a lot of money. For instance, if you take a ₹1,00,000 loan at 10% interest for a tenure of five years, you will need to pay back a total of ₹1,27,482. On the other hand, if you opt for a ₹1,00,000 loan at 10% interest for a tenure of two years, you will have to pay back a total of just ₹1,10,748, saving you close to ₹17,000 in the process.

If you are looking for some of the lowest interest rates on a personal loan, you can simply apply for an instant personal loan on IndusInd Bank’s website or mobile app. IndusInd Bank’s Personal Loans offer attractive features like:

• Highly competitive interest rates
• Swift online loan approval process with digital documentation
• Quick disbursal of the loan amount into your bank account
• Loan amount available from ₹30,000 to ₹5 lakh
• Flexible repayment tenure ranging from one to four years

Negotiate terms with the bank: If you have been a customer at your bank for many years and you are familiar with the local banking office staff, you can try to visit the bank office and negotiate for a lower interest rate on a personal loan. Your bank may be willing to bring down the interest rates if you have been a long-standing customer with a stellar CIBIL score.

Key takeaways

Personal loans are an effective tool to deal with financial difficulties and you can make sure to minimise your costs by opting for a low-interest personal loan and trying to keep your loan tenure as short as possible. Some other ways to keep your interest costs low are to maintain a high CIBIL score, get a loan against a fixed deposit, or negotiate with bank officials.