Monday, August 8, 2016

Factors that affect the interest rate on your personal loan.

1) Your Income
2) Credit/CIBIL History
3) Nature of Employment
4) Bank-Customer relationship

1) Your Income:
The higher your income, the lesser the interest rate, and vice versa. So, if your monthly income is INR 35,000 or less, then banks can charge 16% – 20% interest per annum. Whereas, if you’re monthly income is INR 150,000 and above, then you can get a personal loan at 11.5% – 12.5% interest rate per annum.
Most banks have a pre-decided, minimum net monthly income as a part of their personal loan eligibility criteria. The gap between minimum income specified in the eligibility criteria and your actual income will help to decide your interest rate.

2) Credit/CIBIL History:
If you have good credit/CIBIL record then banks will definitely award you with a better rate of interest. This means that if you have taken a loan previously and managed to pay it off without defaulting then you will have a high credit/CIBIL score. Apart from the loan the banks also take into account payment of your credit card bill record.

3) Nature of Employment:
The nature of your job also plays a crucial role in determining the interest rate. Banks have different checks in place if you are a salaried individual vis-à-vis a self-employed person. So if you are working with a reputed organization then banks will be able to extend a cheaper rate of interest. But if you are working with an organization that is not very well known then a higher rate will be charged. In case you have your own business then banks will give you a loan even if you are in an advanced age. On the other hand in case you are a salaried employee then a loan will not be extended if you are nearing the age of retirement.

4) Bank-Customer relationship:
If you approach the bank where you already have a bank account and are a valued customer then banks may give you certain leeway. This mean you can negotiate with the bank for a cheaper interest rate. Most banks agree to give a concession of 0.5-1% on the interest rate.

Check your loan eligibility and prepare loan repayment schedule.
Ask us for more discussion on +91-92274 81991.

Regards,
PRASANNA KUMAR NEVE from AHMEDABAD.

Insurance Quotes 08-08-2016