17 April, 2025 | 11:11 IST
Personal loans are a popular financing option due to their quick approval process and no collateral requirement. In India, interest rates on personal loans typically range from 10.5% to 24% per annum, varying across lenders. Factors such as income, credit score, employment type, and age influence the final interest rate offered.
A higher credit score and stable income often lead to lower rates, while other aspects like job stability also play a role. Personal loan interest rates are negotiable as well, making it possible for borrowers to secure better terms based on their financial profiles.
You can check your credit score for free on Moneycontrol’s digital lending platform. Moneycontrol also offers personal loans up to Rs 50 lakhs in partnership with eight lenders. The loans also start at an affordable interest rate of 10.5% per annum. The completely digital process also ensure receiving the amount in your bank account within a few minutes to few hours.
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When choosing a lower rate to offer the borrower, a lender takes a number of criteria into account. Not all lenders, however, are open to personal loan interest rate negotiations.
Maintain good credit score
A high credit score reflects good creditworthiness. Applicants with good credit scores are eligible for the lowest interest rates on personal loans from banks and other financial organisations. Before applying for a loan, it’s important to check your credit score.
Customers should seek methods to raise their credit score if it is below 750. If the credit score is higher than 750, customers have a better chance of obtaining a personal loan with a low interest rate.
Check exclusive offers
Banks often offer lower interest rates on personal loans during special occasions like festivals or anniversaries. To stay informed about such offers, it’s advisable to check the bank’s website or contact customer service for details on upcoming deals.
Applying for a loan during these promotional periods can help borrowers secure a cheaper interest rate, making repayment more affordable. Before proceeding, carefully review the terms and conditions of the offer to ensure there are no hidden charges or restrictions.
Prevent skipping repayments
The credit score could suffer in case of failure to make loan or credit card payments on time. Lenders usually consider the payback history when determining the personal loan interest rates.
Customers can improve their credit score by paying EMIs and credit card bills on time. They should also steer clear of applying for loans too often. They should also maintain the lowest possible credit utilisation ratio.
Compare interest rates
It is essential to check the interest rates offered by several Non-Banking Financial Companies (NBFCs) and banks before applying for a personal loan from a specific bank. This will help customers get a personal loan with a favourable interest rate.
Showcase financial stability
Customers who are financially secure and have a consistent income are preferred by banks. One might demonstrate their financial stability with pay cheques, income tax returns, employment letters and bank statements in order to bargain for reduced interest rates.
Negotiate with the right lender
Examine the interest rates that different lenders are offering before applying for a loan from a bank. Select the appropriate bank after taking into account the loan's duration, amount, repayment terms and additional fees.
One can bargain for the lowest interest rate if they are already a bank customer or have a positive relationship with the loan provider. It is best to make a formal written request to the loan source when applying for lower personal loan interest rates.
Customers must demonstrate to the bank that they are creditworthy if they want to receive the best loans at the lowest interest rates.
In conclusion, to get a personal loan at a lower interest rate, borrowers should maintain a high credit score, stable income and track special bank offers. Comparing options and reviewing terms ensures better deals.
With Moneycontrol’s online lending platform, you can access loans up to Rs 50 lakhs from eight lenders, starting at 10.5% per annum, through a 100% digital process for quick approval.
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