4 factors that affect your Personal Loan interest rate
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4 factors that affect your Personal Loan interest rate

  • 2 min read

  • Highlights

  • A high credit score can get you a lower interest rate

  • The higher your income, the lower the interest rate

  • The name of your employer helps in getting a lower interest rate

  • Existing customers with good credit score get a better deal

Unlike a home loan, the rate of interest for a personal loan can vary for each borrower. Personal loans have fluctuating interest rates.
These rates can vary from 12% to 24%, depending on how well the borrower meets the lender's eligibility criteria. That is the reason why two borrowers can get different interest rates even from the same lender.
There are a few factors that determine the interest rates for a personal loan. If you are planning to apply for a personal loan, it is important for you to understand what factors will affect your interest rate.

Take a look at four most crucial factors and how they affect your interest rates:

1. Higher credit score means lower rates: A credit score acts as a validation about how you have performed in the past with the payments of previous loans and credit cards. For each payment made against your previous loan, you add points to your credit score. However, any late payments or defaults can result in bringing down your credit score. The credit score range between 300 to 850 and a credit score of 750 and above is considered to be a healthy score. If you have an impressive credit score, Bajaj Finserv will give you a personal loan at a lower interest rate than the standard market rates. But, remember as you credit score declines, the interest rates will increase.

2. Higher income means lower rates: High income borrowers are always a safer bet. As the income increases, affordability increases and so does the chances of repaying a loan. At Bajaj Finserv, you can get a personal loan if your monthly net salary ranges between Rs.30,000 to Rs.40,000. But, the interest rates might vary for each borrower. For example, a borrower with a monthly income of Rs 50,000 might get a personal loan between 16 to 20%. But, a borrower with a monthly income of Rs.1 lakh might get a reduced rate of 14 to 16%.

Additional Read: This Is How You Can Avail Better Interest Rate For Your Personal Loan

3. Reputed employer means lower rates: Working with a reputed employer can definitely get you a good deal. Reason being, employees of a reputed organisation are considered more stable and responsible towards repaying EMIs on time. Apart from that, the nature of your employment also impacts the loan interest rates. A salaried employee might get a different rate from a self-employed professional. Borrowers nearing their retirement age might have to pay high interest rates to get a personal loan.

Factors that affect your Personal Loan Interest Rate

4. A healthy relationship: We appreciate loyalty and thus our existing customers enjoy some special privileges and benefits.
If you are an existing Bajaj Finserv’s customer and have maintained a good past record, you might get a personal loan at a lower interest rate than the advertised rates.
Having a good repayment record can get you 0.5-1% concession on the existing rates. But remember, there is no such guideline that all existing customers will get a reduced rate; it totally depends on how healthy your relationship has been with us.

Each factor mentioned above can individually impact the interest rates for a personal loan. Having an understanding of how these factors can work together to get you a good deal will help you choose the right time to apply for a loan.

Here at Bajaj Finserv, we offer personal loans up to Rs.25 lakh at affordable interest rates. If you are planning to apply for a personal loan, get in touch with us to know the best deal we can offer you.

Alternatively, you can start by checking our eligibility criteria and filling an online personal loan application. On approval, the loan amount will be deposited in your bank within 48 hours.



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