Collateral-free finances and instant approvals are the key benefits of a personal loan making it stand out from other finances. With easy eligibility requirements determined by most providers, you can easily qualify for personal finance. The minimum salary for a personal loan in UAE is also very low.
Although you might be spoil for choice in case of personal loan offers, the fact is that it is unsecured finance. This makes the lenders cautious of the interest rate on a personal loan that they offer.
A Quick Question:
Have you ever haggled while shopping at a flea market, or while purchasing a car?
There are high chances that you must have. People generally negotiate prices while making purchases, whether small or big.
Considering that the personal loans may involve enough funds for purchasing a car, you may wonder if you should haggle the rate of interest charged or not.
Let’s settle on maybe. It basically depends on who the lender is.
In any case, read below to know how to haggle a lower interest rate as well as how to guarantee a lower interest rate.
Haggling a Lower Rate of Interest
A few fund providers may allow you to negotiate a lesser rate of interest on your personal finance, but others might not.
The best place for negotiating for lower interest rates is a credit union. These financial institutions are comparatively small, do not have a lot of strict rules, and offer vested interest rates for contributing to assisting the local community.
The credit unions are NPOs (non-profit organizations) while the large banks function for earning profits. Hence, the credit unions work keeping your best interest in mind.
In case you turn out to be an applicant who is worthy to lend to, the institution may agree to reduce your interest rate, based on the thought of benefiting you.
Large Financial Institutions
Generally, huge national banks can be strict in terms of their fund practices. You will rarely find national banks that are readily willing to alter their terms or rates of interest offered.
If you have applied for a fund and get approved for the same, the loan terms of such approval are final. There is no scope for different terms, larger funds, or a lower rate of interest.
Some Tactics to be Considered
There are some things that can come handy when you try to negotiate your way to get a low rate of interest.
Your history with the credit union or bank is a thing to be highlighted.
If all the checking and savings account in your name are with a bank and you have been working with this bank for years now, this relationship may prove to be worthy enough for the loan provider for convincing them to offer you a reduced rate of interest.
In case you have borrowed from the lender before in the past, it would be even better. This is because they would have past experience with your credit and trustworthiness.
You may also present before them the things that indicate your stability financially.
Make sure that your lender knows that you have a secure job. This will help them in believing that you won’t be laid off and would be capable of paying the fund amount.
Lastly, invest a considerable amount of time in explaining why you require the money. In case you have been using the fund for genuine reasons, like clearing off the existing debt or improving your financial condition may convince the fund provider to assist you.
Request for a Reduction in Rates during the Existence of the Loan
Another trick that can be tried is contacting the money provider after a while from taking the loan.
In case you have a long-term fund & have never failed to make payments on time. This indicates your trust and credit worthiness properly.
Contact the bank or credit union to check if they agree on reducing the rate of interest. Highlight the development on your credit ratings.
Make sure that the lender is aware of your punctuality in making payments on the personal finance for increasing the probability of your success.
Guaranteed Methods of Getting a Lower Interest Rate
If you fail to haggle a reduced rate of interest on personal finance, the following are guaranteed ways of securing a reduced rate of interest. Check this website to find your best personal loan in UAE at the lowest interest rate.
One method of guaranteeing a lower rate of interest is getting personal finance against collateral. There are no assets backing the unsecured personal loan. In case you have decided on not paying back the fund amount, the bank will be left with nothing they can repossess for recouping the losses.
If you choose to avail secured personal finance, you will have to offer a valuable possession like your car as collateral.
This asset that has been offered as a collateral can be repossessed by the lender in case you fail in making your monthly payments. This helps to reduce the risk of the lender encouraging them to levy lesser interest.
Increasing the Income
Another method for reducing the interest rate on a personal loan is increasing income.
The reason for a higher income equating a lower rate of interest is quite simple to understand.
The lenders are mostly concerned if you are making payments of the funds you borrowed. The more amount of money you earn, the simpler it would get for you to arrange cash to make regular monthly payments. Lesser money you make, more are the chances of it being spent on necessities and not on the repayment of the fund amount.
Since those who have more income can comparatively pay the monthly bills easily, hence presenting a lesser risk to the lenders. This allows the lenders to charge borrowers with higher incomes lower interest.
Improving the Credit Score
You may reduce the rate of interest by improving the credit score. This is by far considered to be the most effective method of qualifying for a lower interest rate from the beginning.
In a Nutshell!
For a quick and affordable personal loan, the most important thing is your credit history and credit score.
You need to submit a duly filled application form for a personal loan. There is also a requirement of the minimum salary for a personal loan in UAE.
This is all about applying for the loan, but negotiating the rates is equally important. Read the above-mentioned tactics and methods for availing a personal loan at a lower rate of interest.