Loans are the most sought-after financial tool in the financial market. Now with demonetisation and relaxed lending terms, personal loan disbursements are growing month-on-month. Both financial institutions and NBFCs are providing loans across borrower-friendly terms and employing industry-leading technologies to speed-up loan approval and disbursement processes.
The present Indian market scenario is teeming with self-employed professionals who now have access to various sources of credit without a hassle. Now, one of the most significant considerations while availing personal loan for self employed is their interest rates. While numerous financial institutions and NBFCs are providing advances with competitive rates of interest, it’s time you know how to avail better interest rate on your loan –
1. Maintain a good credit score
A high credit score of 750 or more assures the lender of your repayment ability when it comes to approving loans. It incurs a sense of confidence in the lender that you are financially responsible borrower. This puts you in an advantageous position to negotiate with the business or personal loan interest rates.
For a self-employed professional, this is how to maintain a good business credit score –
- Always pay your dues on time.
- Avoid excessive credit card purchases.
- Avoid availing multiple loans at a time which showcases you as credit hungry.
- Manage your debts effectively.
One must also keep a close eye on the credit report to see if there’s any suspicious activity.
2. Compare your lending options
As a self-employed individual, you must always compare the loan offerings from various lenders. The lending scenario in India has changed drastically over the past decade as NBFCs have joined the lending bandwagon along with other financial institutes.
For instance, you can avail a Personal Loan for Self-Employed from Bajaj Finserv to meet your short-term business and personal requirements. You can also use this Bajaj Finserv Personal Loan to meet your obligations like –
- Consolidate your existing high-interest debts into a single personal loan
- Invest in machinery for your business
- Fund wedding expenses
- Increase your working capital
Alternatively, you can also get a working capital loan to ensure a steady flow of cash into your supply chain. These collateral-free loans come with attractive interest rates and flexible repayment tenors for your convenience.
3. Understand the interest calculation method
Never choose a loan solely based on its competitive interest rates. As a borrower, you must know how to calculate the loan EMIs on your own. For instance, some financial institutes offer business or personal loans with lower rates of interest. What borrowers didn’t notice is that the calculation at times doesn’t include the gradual principal and interest repayment amount. Therefore, learn how to use a personal loan EMI calculator to determine your equated instalments and manage your finances accordingly.
4. Maintain a healthy repayment track record
If you possess an excellent repayment record in the past, your credibility increases in the eyes of your lender. It not only boosts your credit score but also imbibes a sense of trustworthiness among the lending authorities. Moreover, if you exhibit a poor credit score, chances are your business or personal loan interest rates will be steeper. Therefore, try to build a positive credit history to avail a loan for better interest rates.
Lending institutions often provide lucrative offers on interest rates to match up with the level of competition in the market. These offers mainly come with a limited time-period. But that shouldn’t stop you from availing a personal loan for self-employed to help you cut down on your loan expenses.
