Six Factors that Affect your Personal Loan Interest Rate - Vigyaa

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Six Factors that Affect your Personal Loan Interest Rate

Personal loans are unsecured offerings by banks and NBFCs and can be a handy tool in your times of dire financial needs. There is so much being said about personal loans. Still, people in India do not know everything. One of the most common aspects that people are still unaware of is the things that can affect your personal loan interest rates.

While applying for a financing alternative, one would love to get low-interest personal loans. However, since borrowers are unaware of the factors that can affect it, they are unable to control the rates offered.


For this, the ideal solution is to learn about things impacting a personal loan interest rate. In this article, we will share with you the six key factors. Continue reading.

1. Income Level

The first on our list of factors that affect personal loan interest rate is your income level. If you have a low-income level, then it is almost impossible for you to get low-interest personal loans. However, if your income level is more than average, then it becomes comparatively easier for you to bargain for a better interest rate. You can use a personal loan EMI calculator to know about your monthly EMIs.

2. Repayment history

The next thing that can have a direct link to your personal loan interest rate is your repayment history. If you have borrowed funds in the past which have not been paid on time, then this can be mentioned in your track record. It will make financing agencies consider your transaction as a comparatively risky one, which is why they will be prone to increasing your personal loan interest rate.

3. Defaults

In case you have failed to pay your dues in the past, then that too can be a reason why you won't get low-interest personal loans. Defaults can be one of the biggest drawbacks when it comes to the interest percentage on a personal loan. Therefore, it is always recommended that you pay all your dues on time and never skip on any.

4. Credit Score

A CIBIL or Credit Score is a ranking that allows financing companies to gauge your profile as a potential borrower. Based on this particular rating, they can decide whether to offer you low-interest personal loans or higher one. Hence, maintaining a Credit Score of more than 750 is always recommended.

5. Relationship with bank

Even though this might not be directly connected to the interest rate of your personal loan, it can still have a great impact. If you are a customer of a particular bank for many years and have a good relationship with the organization, then they will be able to accommodate your request for low-interest personal loans. Besides, they will even be able to give you other facilities like a flexible tenure or a floating interest rate.

6. Organizations’ reputation

Lastly, if you are an entrepreneur or a self-employed individual, then your organizations’ reputation also has a relationship with the personal loan interest rate that you receive. In other words, if you have a bad market reputation of not paying your suppliers or something similar, then it can take a toll on your personal loan interest rate.

NBFCs provides borrowers with pre-approved deals for services like personal loan, home loan, business loan, and much more. These deals can cut down the loan processing time in half and make it hassle-free.

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A CIBIL score assesses the loan eligibility of a borrower. A low CIBIL score can make it difficult for you to get a personal loan.

To avail a personal loan in Pune with a low credit score, you can apply for it after improving it. Also, you can go for a personal loan without CIBIL verification. At times, banks and financial institutions offer personal loans without CIBIL verification by considering other factors.

With flexible repayment tenors and low personal loan interest rates in Pune, getting a personal loan is an easy task.

But, a low CIBIL score personal loan in Pune is a bit difficult. Lenders do not approve personal loan applications with low or no CIBIL score at one go.

However, you can still manage to get a personal loan in Pune without CIBIL verification. Read on to know such ways now!


Easy Steps to Get a Personal Loan in Pune Without CIBIL Verification

1.Apply For a Secured Personal Loan

CIBIL score is one of the significant eligibility criteria in a personal loan. A good CIBIL score gives a sense of security to the lender in case of an unsecured personal loan. But, if you apply for a secured personal loan, you can avail of it without CIBIL verification. It is because the collateral asset is an assurance to the lender for the repayment of the loan. You can provide gold, fixed deposit receipts, shares or an insurance policy as collateral security.

2. Make Use of a Stable Employment History

If you have a steady income record and a stable employment history, you can use it to convince the lender about loan repayment. In such a case, you may get a personal loan even without CIBIL verification.

3. Take The Help of Your Employer

If you are an employee in a company, you can take the help of your employer. Companies have loan policies for their employees. They also share a healthy relationship with banks where they hold the salary accounts of the employees. You can avail the benefits of the loan policy of your company or take help from your employer to approach the bank for your loan application. It often works in getting a personal loan without CIBIL verification.

4. Apply For a Joint Loan

You can apply for a joint loan with any of your family members as a co-applicant. If your co-applicant has a better credit score, it increases the chances of approval of the loan application.

5. Make a Lower Personal Loan Application to a Smaller Bank

There are small banks that do not have access to CIBIL scores. These banks provide lower personal loans at high interest rates. If you want to avail a loan without CIBIL verification, you can apply to these lenders. Since they do not check the credit score, it becomes easier to avail a loan without CIBIL verification.

6. Get a Guarantor

You may ask a family member or friend with a high credit score to act as a guarantor while applying for a personal loan. The guarantor’s good credit score is beneficial for loan application approval.

You can also approach private lenders if there is no other option. But, you must keep in mind that they charge very high interest rates. You can ask for help from a friend or relative in case of an emergency.

These were some ways in which you can avail a personal loan with low CIBIL score. You can consider one as per your profile and apply accordingly.


Bajaj Finserv brings to you pre-approved offers on its various financial products like personal loans, home loans and many more. It is to simplify the loan procedures to make it less time-consuming.

You can check your pre-approved loan offer by sharing some basic details like your name and mobile number.

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