CASHe Personal Loan Interest Rates

2. Income Level

Having higher and stable earnings suggests a lower likelihood of default. This reduces the risk related to the loan for the lender, helping you get a lower interest rate.

3. Employment History

Lenders may view frequent job changes as risky. So, it is essential to be working for at least two to three years in the same organisation, as it demonstrates consistency and reliability.

4. Loan Tenure

Shorter tenures may come with a higher interest rate. On the other hand, longer tenures may offer slightly lower rates. However, the total interest paid may be higher in this case as the charge accrues over a longer period. 

5. Debt-to-Income (DTI) Ratio

This ratio compares your monthly debt payments to your income. A lower debt-to-income ratio reassures the lender of your loan repayment capabilities. This may result in you getting favourable loan terms.

6. Relationship with the Lender

You may get better loan terms and lower interest rates if you are a loyal customer of the lender

7. Type of Employment

Your employment type, i.e., whether you are salaried or self-employed, can influence the interest rate. Salaried individuals may receive lower interest rates. This is because their income is fixed and stable. Meanwhile, self-employed individuals and business owners may get higher interest rates. This is due to the perceived instability of their income.

8. Economic Conditions

Factors like central bank policies, inflation, etc., can impact interest rates. In case of an increase in inflation rates and benchmark rates, personal loan interest rates may also surge.

9. Loan Type and Lender

The interest rate offered differs from one lender to another. This is due to the differences in their risk assessment models and product offerings. Also, personal loans with collateral, come with lower interest rates than unsecured loans. Thus, the type of loan and lender you choose can affect your loan’s interest rate.