When we are in urgent need of money, a personal loan is something that comes immediately to your mind. The reason is quite obvious and there are many. You can get the amount without any collateral and in a short span of time. But there is an important factor related to it known as Lowest Personal Loan Interest Rates that affect your loan facility in many ways. Moreover, if chosen wisely, it can help individuals in saving a huge amount of money.
Want to know about these prospects with which you can ensure maximum savings on your personal loan facility? Here, we are showing some of them along with the factors that affect personal loan interest rates. Keep reading to understand more about it!
Where Can the Lowest Personal Loan Interest Rates Help You?
As we told earlier that with the lowest personal loan interest rates, you can enjoy savings. We are showing them below. Have a look!
Balance Transfer Facility
Do you know that with this facility, you can transfer your outstanding principal balance to another lender at an affordable interest rate? No? Well, you do know it now. Suppose you have a 5-year personal loan, and at the end of 2 years, you want to opt for Balance Transfer. So, by doing this, you would be able to save both on EMI and Interest Outgo. You must be thinking how? Well, it will be possible because of the lowest personal loan interest rates that you will choose. However, keep this thing in mind that it is essential to choose Balance Transfer during the initial years of your loan so that you can ensure the maximum savings.
Choose Lowest Personal Loan Interest Rates
When you are going for a personal loan, it is important to check all the lenders before finalizing that suitable option for you. One of the main reasons to do so is that you don’t want to pay a monthly installment that is more than 50% of your monthly income. Otherwise, it will ruin your finances. That’s why you should always choose affordable interest rates. You should also know that lenders assess a few important factors before providing you the final interest rate. These factors are your age, Employment Type, Job History, Monthly Income, Residing Location, Existing Obligations, and Credit Score.
Prepayment of your Personal Loan
One of the other ways to make sure you ensure maximum savings on your personal loan is to prepay the loan. As it suggests from the name, you can repay the loan before its pre-decided tenure. By doing this, you are making sure that you don’t end up paying a huge interest outgo. Let’s say your principal outstanding balance on your personal loan at the end of 1 year is INR 4 lakh. So, if you make a prepayment of INR 1,00,000, your new outstanding balance would be INR 3 lakh. Now, you can choose from two options. Either you can keep paying the same EMI amount, and repay the loan earlier. Or you can decrease your EMI amount to pay the loan within the fixed tenure. Both of them will help you save a huge interest outgo in the process.
As we are talking about all these prospects, you should also know that you can do these calculations with the help of the Personal Loan EMI Calculator. Use this tool to have an estimate of your savings so that you can make the right decision. The crux is, if you choose the lowest personal loan interest rates, your EMI amount, as well as your interest outgo, will be lower and vice versa.