What are the Factors That Affect your Personal Loans Online Interest Rate

What are the Factors That Affect your
Personal Loans Online Interest Rate?
Personal Loan can help you to survive during the financial crisis. Whether it is
for a medical emergency, home loan down payment, rental home security
deposit or just a trip to your dream destination. A personal loan has the potential
to take you out from any kind of cash crunch. Personal Loans are easily
available and quick to avail with least of the formalities. But before you go for a
personal loan, it is essential to consider many things among which the interest
rates at which these loans are offered is the most important one, some lenders
offer low and attractive interest rates while others offer it at high and
unaffordable rates.
Factors that Affect Interest Rates of Personal Loan

Income Level and Loan Amount Comparison:
The personal loan interest rate is totally dependent on the income and the
company in which the applicant works. Lenders compare the income of the
applicant with the loan amount and they will gauge if you are capable to repay
the loan without defaulting. The interest rate varies as per the risk involved as
well.
Loan Tenure:
This is yet another important factor which determines the interest rate of a
personal loan. The shorter the loan tenure the higher the interest rate will be and
vice versa. When the return is for a long period of time the rate will decrease
respectively.
Credit Rating of the Individual:
CIBIL Score is considered by each bank to understand the creditworthiness of
the applicant. In case any default payment history is found, or a huge
outstanding loan amount, banks have every right to reject the loan application or
charge a higher interest rate against the loan. Hence, it is very important to keep
a good track record of financials for present and future plans.
The Company in Which you are Employed:
Lenders have categorized private companies according to their track record and
company worth and stability. These categories are super cat A, cat A, Cat B, Cat
C and so on. The applicant working in Super Cat A will be considered the most
eligible for a loan and will be charged a lower interest rate as compared to Cat C
and Cat D employees. Though, there are others factors too to decide the
eligibility and interest rate of an applicant.
Debt to Income Ratio:
This is also an important prospective which lenders generally look for.
Your Debt to Income ratio signifies the difference between your net total
monthly income and the total payable EMI which you are paying against all
your outstanding debt mostly. An applicant paying a larger part of his/her salary
towards the outstanding debt can be rejected for a loan or may be charged a
higher rate of interest.
Even a little relief on your personal loan interest rate can help you a lot to save
some money and add to your finances. Hence, never leave any scope and
always try your best to get the best interest rate for your personal loan, you can
do it easily by having a proper research and considering the above-mentioned
points.