How do Lenders Charge Interest on a Personal loan?

Last Updated : Jan. 22, 2020, 12:58 p.m.

The loan interest rate is the deciding factor while applying for a personal loan. As you know in personal loans users don’t need to provide any assets. That’s why lenders charge a higher interest rate on personal loans compared to loans backed by assets. And to get a low rate of interest you need to follow the pointers below.

• Check loan criteria: Several lenders keep different eligibility criteria for loan approvals. So read the criteria and see where you fit.
• Age: The applicant’s age also affects the loan interest rate. Because, if you near your retirement age, your job length won’t be that long, making you a less eligible candidate for lower interest rate offers. The minimum age required for a loan approval is 21 years and above and less than 60 or 65 years.
• Repayment Record: If you have a running loan EMI and spend on your credit card , the lender will check all when you apply for a personal loan. If you have a clear payment history with no default, you can get a lower rate of interest.
• Income: The monthly income must be INR 15,000 and above to get a personal loan from any bank or lender. As personal loans are unsecured, so the loan amount is dependent mainly on your income.

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