How To Get Low Interest Rates And Charges On Your Personal Loan

20 January, 2026 | 14:46 IST

Personal loans can be a useful tool during financial emergencies or for fulfilling desires such as a wedding, home renovation or travel. They can be used to meet both large as well as small financial needs. The disbursal time is usually one or two days and the requirement for submitting paperwork is minimal.

However, to maximise your borrowing costs, you need to take into account personal loan interest rates and charges before finalising a loan offer. A low interest rate will lead to a lesser debt. On the other hand, high interest rates and additional charges can make repayment a burden.

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Here are some of the things you can do to get personal loans at lower interest rates.

How To Get Low Interest Rates On Personal Loans

Maintain A High Credit Score

Your credit score is one of the most significant factors which a lender considers while reviewing your loan application. A high credit score gives you respectability as a borrower. On the other hand, a low credit score makes you look risky in the eyes of a lender. Typically, a score above 750 will lead to a lower interest rate on a personal loan.

Compare Interest Rates Charged By Lenders

Personal loans rates vary across banks and Non-Banking Financial Companies (NBFCs). It is important to compare the annual percentage rate (APR), processing fees and other charges to decide which lender suits you the most.

In this context, it is important to check the website of different lenders to see how much personal loan charges are applicable. You can also use the Moneycontrol app to get loan offers of up to Rs 50 lakh from top lenders. The interest rates start at 10.5% per annum and you can complete the loan application from the comfort of your home.

Select A Loan With Shorter Tenure

It is true that longer tenures reduce monthly EMIs. However, they increase the total interest paid. Choosing a shorter tenure can lower the interest rate and overall loan cost. Lenders often offer lower rates for shorter tenures as the risk of default decreases. You must ensure the EMI fits your monthly budget.

Choose Secured Loans

If you’re open to pledging collateral such as gold, property or fixed deposits, you can opt for a secured personal loans. They often come with lower interest rates than unsecured loans. This is because the presence of collateral reduces the risk for the lender. In case of default, the lender can seize and sell the collateral to recover the outstanding loan amount.

Avoid Multiple Loan Applications

Every time you make a loan application, it results in a hard inquiry on your credit score and impacts it negatively. If you make multiple applications, it will damage your credit score even more. Therefore, you must make one application at a time, starting with the lender offering the best terms.

Time Your Application Wisely

Banks often run special promotions during festive seasons. At such a time you could get lower rates or reduced processing fees. Similarly, when the Reserve Bank of India (RBI) lowers the repo rate, banks often reduce lending rates. You must track economic news for such trends and make an application accordingly.

Negotiate Processing Fees and Charges

If you have a long-standing relationship with your bank, use it to negotiate for lower rates and reduced processing fees. Some banks may waive or reduce certain charges for loyal or premium customers. You can highlight your high credit score or stable income to secure lower interest rates.

To get the best personal loan interest rate and charges, head to the Moneycontrol app. Top lenders are offering personal loans of up to Rs 50 lakh through the platform. With interest rates starting at 10.5% annually, you can get excellent terms and conditions through the app. The process is totally transparent and you won’t have to pledge a collateral to get the loan.

Securing a personal loan with low interest rates and charges requires research, and smart timing. Building a strong credit score, comparing interest rates charged by lenders and negotiating terms are some of the best ways to get good terms and conditions. By following these steps, you can minimise borrowing costs and repay your loan comfortably.

You can use an EMI calculator to plan your budget. Further, keep an eye out for any promotional offers by banks which could lead to lower personal loan interest rates and charges.