The affordability of an online personal loan depends mainly on the interest rate your lender offers. The higher the rate of interest, the larger is the amount to be paid every month. However, some lenders or their personal loan apps may not have the same interest rate for each individual.
Several factors influence your loan interest rates, either dropping them down or surging them high. This article will discuss such top five factors to keep in mind before you proceed further with purchasing an online personal loan.
Five Factors That Affect Personal Loan Interest Rate
Your monthly income is one of the most important deciding factors when applying for a personal loan. The higher your monthly payment will be, the lower will be your loan interest.
This is because the applicants who earn more are observed to have a lower probability of defaulting on the monthly repayments.
Your Credit Score
The credit score is a three-digit numeric rank given to you by a Credit Rating Agency based on your credit repayment history. Having a good credit score indicates that you can manage your loans and repay them on time.
Whether you apply for a loan through an online loan app or the traditional way, the lender checks upon your credit score to understand your credit history and grant loan approval.
Your Loyalty Towards The Lender
Another factor that decides your loan interest rate is your loyalty to the lender. Most lenders with a long and healthy relationship with their existing customers seem to offer them attractive privileges and maintain a mutual relationship with the applicant.
You can get a high probability of getting a concession of 0.5 to 1% on your loan interest if you have a savings/salary account with the lender with a nice cash flow in the account and no defaults.
If you work in a reputed company, then there is a higher chance for you to get a better offer on your personal loan. It is because the lender company considers the employees from a reputed company valuable consumers to benefit their financial business.
Therefore, if you have a stable job, there is a greater probability of getting low-interest rates on your loan as you have a comparatively more potential to repay the monthly EMIs.
Loan Repayment History
Apart from checking up on your credit score, the lending firm also looks into your previous loan history and tracks your repayments to decide the interest rate. If you have a large number of late payments, then there is a great possibility that you will be charged with significant interest rates.
However, you can also look for a loan app to know about the offers on personal loans, along with checking your eligibility criteria for a loan.
Instant Personal Loan Apps
There are several online instant loan apps out there, and one of the best among them is the Fullerton App. You can use their app to go through their website, look for the eligibility criteria, or use the EMI calculator.
The personal loan interest rates at Fullerton App start from 11.99% per annum. You can also avail of a loan amount ranging between INR 50,000 to INR 25 lakhs. Generally, a processing fee of 0-6% of the loan amount is charged with 12 to 60 months of the Loan period.
The documents required to get the instant loan are:
- KYC documents (PAN card & valid address proof)
- Proof of employment (offer letters)
- Your salary slips (past 3 months)
- Bank account statements (past 6 months)
The documentation process is quick in this instant loan app and the entire procedure takes place online. In addition, the amount you borrow gets credited to your account within 24 hours of approval.
Before finalizing your application for a personal loan, it is highly recommended that you go through all the plans and eligibility criteria and decide after analyzing everything. Rummage through several lenders and select the one that would be best for you and your credit needs.
Ensure you have all the documents ready with you beforehand along with a good credit history. Keep the factors mentioned above in mind and you’re all set to get yourself an online personal loan.