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How to Get a Personal Loan with the Lowest Interest Rate in India?

Submitted by admin on April 2nd, 2025

Personal loans provide an excellent financial solution for medical emergencies plus weddings, vacations, and unifying multiple debts. The rates that personal loans charge directly affects your payment responsibilities. Choosing a loan with low interest saves you money and makes borrowing more manageable. These steps will help you get the lowest personal loan rates available in India.

Maintain a High Credit Score

• Your personal loan interest rate depends strongly on your credit score. Better borrowers with CIBIL scores above 750 can get lower rates on their personal loan applications. To improve your score:
• Pay your credit card bills and EMIs on time.
• Maintain a low credit utilization ratio (below 30%).
• Avoid multiple loan applications within a short period.

Compare Interest Rates from Different Lenders

Every bank and NBFC in India offers different personal loan interest rates. Before applying, compare rates from various lenders, including:

• Public sector banks (SBI, Bank of Baroda, etc.)
• Private banks (HDFC, ICICI, Axis, etc.)
• NBFCs (Bajaj Finserv, Tata Capital, etc.)
• Fintech lenders (Paytm, MoneyTap, etc.)

Using online loan comparison tools can help you find the best rates in real-time.

You Should Apply for Loans from Lenders With Whom You Already Do Business

Banks give better interest rates to their long-term loyal customers. Check if your existing banking relationship with the lender allows you to enjoy better loan rates for your salary account FD and other stable bank products.

Opt for a Shorter Loan Tenure

The risk level of a short-term personal loan is seen as lower by lenders which leads to better interest rates. By making higher regular payments you can get lower interest from a personal loan when you select a 1-3 year loan term instead of 5 years.

Check for new offers or discount promotions that match your needs

Banks and NBFCs offer unique deals especially for Diwali, New Year and Independence Day seasons. Banks and NBFCs provide bonus offers regularly with reductions in interest charges, no fees for processing, and monetary refunds.

Consider a Secured Personal Loan

Add security through an FD or shares to lower personal loan interest rates since these loans don’t require any collateral. Banks take less risk with secured loans to offer loan applicants better financial terms.

While Enrolling with a Creditworthy Partner or Assuring Friend Increases Your Loan Approvals Possibilities.

When you have bad credit ratings it helps to add someone with solid financial background as your co-signer since this improves your chances of obtaining better rates. When you apply with a dependable guarantor their good credit scores make lenders feel safer about approving your loan.

Negotiate with the Lender

People often miss out on the chance to negotiate interest rates because they do not know that lenders will grant lower rates to borrowers with excellent credit or established relationships. Start discussions with the lender to reach improved conditions for your loan.

Final Thoughts

Strategic planning helps you get personal loans in India at their lowest interest rate possible. Keep good credit score records while looking at multiple lenders and use holiday deals plus attempt to persuade lenders to reduce rates. Following these steps lets you find the most favorable terms while decreasing your ongoing expenses.