Perhaps the most vital information you seek before applying for a Personal Loan, “How much interest will I pay?” Here’s how the interest on your Personal Loan is calculated.
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Monthly Income
There’s a definite relationship between your salary and interest rate. If you make less than Rs.35, 000 per month, the interest you pay would be between 16-20% per annum. Earnings of around Rs.75, 000 would make you eligible for an interest rate between 14.25 – 16% per annum, and so on. In simple words – higher income, lower rate.
Employer
If your salary is high but you work for a small company, you still might find yourself paying high interest. If you work for a company that is listed by the bank as a priority company, you may get a loan at better rates. Stability during repayment is considered an important factor.
Credit History
If you have been regular with your loan repayments, your credit score is likely to be higher. Banks use this information to assess your repayment capacity. This may affect the interest rate you are offered.
Negotiation
Your relationship with the bank and the ability to negotiate may also affect your interest rate to a great extent. Keep your credit report handy and if it is in good shape: negotiate!
That’s some good, solid information, right? Apply for a Personal Loan, now!