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Personal loans are a helpful way to manage big expenses that you can’t pay for all at once. You might need money for urgent home repairs, unexpected medical bills, or planning something important like a wedding or a big move. In these situations, a personal loan can give you the financial support you need.

However, it’s important to find the best Personal Loan Interest Rates so you don’t end up paying more than necessary. A lower interest rate means smaller EMIs and less total cost.

Before we look at how to get the best Personal Loan Interest Rates, let’s first understand what they are and why they matter.

What is personal loan interest rate?

A personal loan interest rate is the amount a bank or financial company charges you for borrowing money. In India, it usually starts around 10% to 12% per year. The exact rate depends on things like your credit score, income, and how trustworthy the lender thinks you are.

Most personal loans don’t need any collateral, which is why the rates are often higher than home loans. The interest rate can be fixed, meaning it stays the same for the whole loan period, or floating, which means it can change with the market.

Understanding Personal Loan Interest Rates helps you make better borrowing decisions and plan your repayments smartly.

How can you get the best personal loan interest rate?

Here’s one simple way to improve your chances:

1. Maintain a good credit score

Lenders usually offer the lowest Personal Loan Interest Rates to people with a credit score of 750 or above. A high score shows that you manage money well and are less risky to lend to.

How to improve it:
Check your credit report for mistakes, pay your EMIs on time, and try to use less than 30% of your credit limit. These small steps can help boost your score and get you better loan offers.

2. Compare Loan Offers

Different lenders may offer very different interest rates. Comparing options helps you find the lowest cost and best terms.

What to do:
Use online tools to compare loan offers side by side. Look at the APR (Annual Percentage Rate), which includes both the interest and extra fees. You can also talk to lenders directly—some may offer better deals if you show them a lower offer from someone else.

3. Choose Between Flat and Reducing Interest Rates

With a flat rate, interest is charged on the full loan amount for the entire term. With a reducing rate, interest is charged only on the amount you still owe, which usually saves money over time.

How to decide:
Reducing rates are often cheaper for long-term loans. Ask your lender to show you both options so you can see which one costs less in total. Understanding the difference is key to choosing the best Personal Loan Interest Rates.

4. Look Out for Seasonal Offers and Pre-Approved Loans

Banks often give special loan deals during festivals or promotions, especially to people who already have accounts with them or are pre-approved.

What to do:
Check for offers from your existing bank. If you’re pre-approved, you may get faster approval and a lower interest rate. These limited-time offers can help you save more.

Get the Best Deal at Unity Small Finance Bank

Getting the right Personal Loan Interest Rates can make a big difference in how much you repay. Unity Small Finance Bank offers competitive rates that help you save money and manage your loan better. Apply online today and see what offers are available for you!