Personal Loan For Low Cibil Score

When you plan to get a personal loan in Bengaluru or any other city, you can follow a few important guidelines in order to get a good rate of interest. You will also be required to do proper research before you apply for a loan. Some of the important factors that should be kept in mind for getting a low interest rate include:

1. Existing loans

• In case loan applicant have any existing loans, like home loans, credit card loans, make sure your EMI's are paid on or before due date.
• If EMI is paid after the due date banks generally has to report it to CIBIL and your score may get impacted

2. Down payment

• Its always good to make some down payment of around 5% to 10% of the outstanding personal loan it will help in reducing the over all interest on personal loan
• Use your yearly bonus or savings for part payment of the personal loan

3. Negotiate before you accept the personal loan offer

Negotiate on interest rate on personal loan before accepting the offer, also check on pre closure charges and foreclosure charges. This will help you to plan your loan closure early.

4. Your employment and experience

Your employment and experience also helps you in negotiating interest rate, every bank and NBFC will categorize the companies in Category-A and Category-B

Loan applicant working in CAT A company can generally negotiate lower rate of interest, Category A companies are large companies, employing 1000's of employees and have offices all over the country or around the world.

5. Tenure of the personal loan

Try to keep your personal loan tenure low, as it will have direct effect on the interest you pay to the bank. Lower the tenure lower will be the interest outgo.

With higher tenure though the EMIs will be considerably low. The overall interest amount increases with the length of the payback period.

Example : Lets take scenarios, were loan tenure is 3 years and 5 years. Though the personal loan emi will come down, but interest paid on personal loan over the tenure will almost double from 85k to 1.44 lacs.

Scenario 1 :

• Loan Amount - 5 lacs
• Interest rate : 10.5%
• Tenure : 3 years
• EMI per month - 15,251
• Total interest paid during the tenure : 85,044

Scenario 2 :

• Loan Amount - 5 lacs
• Interest rate : 10.5%
• Tenure : 5 years
• EMI per month - 10,747

Total interest paid during the tenure : 144,817