Personal Loan: 5 key strategies to lock interest rate before it spikes

If you are planning to raise a personal loan in the near future, it is important to carry out an exhaustive background search. Among several things, it is vital to scout for the lowest possible rate so that you can raise the loan at an affordable interest rate.

There are times when the interest rate is on an upward trajectory and every two months or so, central bank ends up raising the lending rate by 50 basis points or so.

It is vital to mention here that the current macro economic fundamentals indicate a contrarian situation and there is a possible rate cut ahead – and not a hike – by the Reserve Bank of India (RBI).

Notably, US Federal Reserve on Wednesday cut its benchmark rate in the third consecutive meet to 4.25-4.50 per cent.

After the benchmark rate cut, lending rate will follow and the loans will be given at low rates. Consequently, your interest rate component, and therefore your EMIs, tend to fall.

It is recommended to raise a personal loan when the interets rates are at a low level.

These are some of the key points one should remember when it comes to the raising of personal loan at the lowest possible rate.

Five key personal loan strategies 

1. Fixed rate of interest: Typically, personal loan interest rates are offered at a fixed rate of interest.
2. Before the rate hike: Prior to raising of interest rates, it is recommended to raise the personal loan rather than waiting for the day when you need it.

3. Maintain good credit score: Needless to mention that one should maintain a high credit score so that one can easily raise a personal loan at the lowest possible rate. Banks usually

4. Consolidate loans: You can raise a personal loan at the lowest rate possible in order to consolidate a number of high-interest loans. This way you can lock your loan at a lower rate before it spikes again

5. Check pre-approved offers: A number of banks offer pre-approved loans based on a their credit score. You can raise a loan like so long as it is being offered at an attractive interest rate.