Globally, the desire to own better products has grown along with the rising standard of living. Despite budget constraints, quality is one aspect no one wants to compromise with. And with competitive personal loan interest rates offered by institutions, people readily turn to them for financial needs. Further, influential advertising might tempt you to sign up with little introspection.
But one aspect that you must consider is the interest rate applied to the principal amount. With several instant personal loan facilitators, deciding the best one can become tiring. One needs a straightforward, thorough guide in choosing lenders and negotiating interest rates.
Say you require a sum of INR 10000 (principal), which you borrow from a lender. Through mutual agreement, you pay them INR 10500 in 5 months.
In this scenario, you pay the lender an interest of INR 500. Using the basic simple interest formula, that is, I(simple interest) = P(principal) x R(interest rate) x T(Time in years), we can find out the interest rate.
R = I/(TxP) = (500/10000) x (12/5)
This comes to about 0.12, or a 12% interest rate.
While loan lenders might use variations, this formula is a great way to understand personal loan interest. The next step is deciding on a loan lender that works best for you.
Refrain from letting fancy advertising impact your decision while selecting a lender. Since taking a loan can significantly affect your financial stability in the long run, you must consider a few factors before opting for a lender.
Once you select your perfect loan lender, consider negotiating to get an ideal personal loan interest rate.
While all bank personal loan interest rates are generally lesser than non-banking financial organisations, the following steps can help you get the best deal.
A personal loan, sometimes necessary, is also an impulsive decision sometimes. But, in any case, factor in personal loan interest rates, vendor credibility, flexibility and terms and conditions before you choose one.
And if you are looking for a way to simplify the process, Fi Money is here to help. With the best interest rates and a transparent processing mechanism, you can avail of up to ₹ 5,00,000 without hassles.
Now the best part, you can do all of it in just about the same time you take to set up a social media account!
While choosing a loan lender, you must check for interest rate, processing time, offered amount, and hidden charges. It is also best for you to check lenders' authenticity based on prior customer experiences and service.
Here are 7 factors that can help you choose a personal loan:
Before negotiating interest rates, ensure you know the prevailing rates in the market, and look for special offers. Moreover, maintaining a good credit score, timely repayment history, and cordial relations with the lender can help you obtain the best interest rates.
When selecting a personal loan, some of the factors to consider and compare are interest rates, processing times, tenure, foreclosure/prepayment fees and documents required.