There are numerous financing alternatives available in the market. But the most convenient out of them all is a personal loan. The first thing that would come to a borrowers mind while applying for a personal loan is the interest rate percentage.

Everyone wishes for low interest personal loan to be more affordable so that it fits in our monthly budget. However, there is a stigma attached to personal loan rates. Most people feel that these are beyond affordable and there is no way to make it better.

In this write-up, we will share with you six factors that would help you get an affordable personal loan interest rate. Hence, read on till the very end!

1. Credit Scores

Your Credit Score showcases your borrowing history. However, it also helps determine the interest rate that you would end of paying while borrowing a loan. The same is the case with personal loan interest rates. If you have good credit or CIBIL Score, then the interest rate charged will automatically be significantly low.

2. Private Banks

A lot of people prefer visiting public sector banks to fulfil their financing requirements. But when you are trying to achieve low personal loan interest rates, then opting for private banks can be a better alternative. Due to so many banks competing against each other, you will be able to find affordable personal loan interest rates easily.

3. Online Search

The next thing that you should always remember to do while applying for a instant personal loan is conducting online research. Most financing organisations list their personal loan services online. Moreover, they also mention their interest rates for these loans depending on the amount and duration. Thus, it becomes easier for you to compare the rates of two or more financing organizations online.

4. Total Loan Amount

Another thing that can have a direct effect on your personal loan interest rate is the actual borrowing amount. If you are applying for a large chunk of finance, then the interest rate will also increase since the lender will treat you as a greater risk transaction. But if the amount is small, the interest percentage also drops due to the reduced scale of risk.

5. Floating Rate

The last thing to consider while fixing your interest rate percentage is its type. There are two types of interest rate categories fixed as well as floating. Although a lot of people prefer a fixed interest rate to maintain stability, it can sometimes be a disadvantage as well. Therefore, opting for floating personal loan interest rate is highly recommended. By doing so, you might be able to enjoy a dip in your interest percentage if the rules change after a certain period.

6. Short Loan Term

A personal loan is a short term finance generating alternative. But it can still be of significantly longer duration. To make sure that you will receive the best possible personal loan interest rate, you must keep the duration as short as possible.

NBFCs like Bajaj Finserv can give you pre-approved online deals for financing services. With the help of these deals, you will be able to borrow personal loans, business loans, home loans, and EMI finance easily. These pre-approved deals will also cut down on the loan processing time.