Return to site

6 Important Aspects That May Impact your Personal Loan Interest Rate

· Personal Loan rates

The personal loan interest rate is fixed for every borrower. But depending on the eligibility criteria, this rate can vary from time to time. There are a few factors that affect the interest rate of an individual.

1. Income

A person with a high disposable income can have a greater repayment capacity. Therefore, one with a higher income would get a lower rate of interest. Also, it is one of the common practices in any lending sector that people who have a stable and high disposable income would get lower Personal Loan Rates.

2. Employer's status

If the borrower is from many well-known and reputed organizations, they would be responsible enough to make timely payments. It would help them to have a lower rate of interest.

3. Credit score

It is one of the important aspects that affect the interest rate of any personal loan. A high credit score of 750 and above would help any borrower get a lower interest rate.

4. Relationship with the lender

A good relationship with the lender can help you have some leniency while the lender charges the interest rate. Make sure that you have a long and loyal relationship with the lender of the financial institution to get a favourable rate of interest.

5. Debt to income ratio

A low debt to income ratio would be ideal for anyone to get a lower personal loan interest rate. If the ratio is high, it can be a burden for the borrower.

6. Default history

A borrower with no default history would receive a lower rate of interest.

One must consider all these aspects before getting any loan amount. These can somehow affect the interest rate of a personal loan. However, most of the lenders in India prefer to have a borrower with 0 default over the past 12 months.

Stay Tuned with All About Loans for more Finance Blogs.


All Posts

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OKSubscriptions powered by Strikingly