Allahabad, the administrative headquarters of the district with the same name and the judicial capital of Uttar Pradesh is the largest commercial centre with the second-highest per capita income. It has a stable and diverse economy comprising tourism, agriculture and fishing, real estate, railways, transport and logistics, banking etc. which is responsible for producing the third-highest GDP in the state.
Large-scale construction work has also played a significant role in strengthening its economy. Consequently, more individuals from Allahabad are availing personal loans to meet an array of financial needs like business funding, debt consolidation, medical emergency, educational fees and so on.
However, even though these unsecured loans can be availed quickly with nominal documentation, their interest rate can be financially draining if not selected properly. Therefore, borrowers should follow the steps given below to avail a personal loan in Allahabad at an attractive rate of interest.
Take measures to maintain a high CIBIL score –
Since personal loans are unsecured credits, CIBIL score is one of the most important criteria based on which lending institutions assess the eligibility and risk factor of a borrower. It is a 3-digit number, which is a reflection of a borrower’s creditworthiness. Based on this score, lenders decide the loan amount as well as the interest rate. The ideal CIBIL score for a personal loan is 750 or above.
Individuals who hold a CIBIL score of 750 or above stand a better chance to negotiate with their lenders for a competitive interest rate on their instant loan in Allahabad. Therefore, knowing the things you can do to improve your personal loan credit score can prove beneficial in the long run.
Look out for seasonal offers –
Before applying for a personal loan, make sure to look out for seasonal offers on these advances from different financial institutions. During festive seasons or any other period in the annual timeline, lenders offer loans at reduced interest rates along with other attractive terms of service. Therefore, opting for such offers will facilitate borrowers to save a substantial amount on interest payment on personal loans in Allahabad.
Some lenders such as Bajaj Finserv also bring their pre-approved offers to borrowers for quick and hassle-free loan application processing. Besides personal loans, such offers can be availed on several financial products too, such as business loans and credit cards. Check your pre-approved offer only by entering your name and contact details.
Check the interest calculation method –
In some cases, even if the lending institution is offering a personal loan at a reduced interest rate, the interest calculation method opted by them may result in the borrowers paying a high amount as interest at the end of the loan tenor.
There are two types of interest calculation methods – flat and reducing interest methods. In the former, interest is calculated on the total loan amount for the entire tenor.
On the other hand, in the reducing interest rate calculation method, the interest is computed on the outstanding loan amount. Thus, in the former, the interest amount is constant while in the latter, it reduces gradually.
Borrowers should also keep in mind that the type of interest rate they opt for – fixed or floating interest rate also impacts the amount of interest they pay. For instance, a fixed interest rate is generally higher than the floating interest rate.
Use your employment credentials for better rates –
Employment credentials, as well as work experience, are considered by lending institutions to assess a borrower’s ability to repay loans. As such, individuals who are employed with a reputed public or private company for quite some time hold a high repayment capacity and portray a low-risk profile for lenders.
Additionally, self-employed individuals with their own practise such as doctors, architects, chartered accountants or those with a vintage of 3 years or more are also considered to be low-risk profiles for lending. Consequently, lenders are more willing to provide them with loans at favourable terms like a low rate of interest.
Apart from understanding how to avail of a competitive rate, one should also know the factors affecting personal loan interest rate. Nevertheless, before applying for a personal loan in Allahabad, you must also compare the other fees and charges levied by lending institutions, which can add to the overall cost of the loan.