How to Decrease Your Loan Interest Rate

Taking out loans is useful for a variety of purposes. You might want to consolidate credit card debt or take care of necessary repairs on the house.

Paying back the loan can start to feel stressful after some time, especially when you look at the interest rates. Fortunately, you can use some strategies to try to get the interest lowered.

Negotiate a Lower Rate

One possible solution is to simply ask for a lower rate. Call the loan provider to find out what options are available. If you have consistently made regular payments or even extra payments, use this information as evidence as to why you might be entitled to a lower interest rate. 

Remember that the loan provider might deny your request, but at least trying this strategy is important.

Refinance Your Loan

Another way for borrowers to get loan modifications is through a refinance. Due to an improvement in your credit score or lower interest rates in the market, a refinance may be available. Depending upon the type of loan you're refinancing, you may be able to get a cash-out option as well. 

For example, when people refinance their mortgages, they sometimes do so with the cash-out option. You can put that extra money toward other home modifications or debt while still getting a lower interest rate.

Improve Your Credit Score

Your credit score is one of the elements on which your interest rate is based. Improving your credit score can, therefore, assist with getting a better interest rate. Take a look at your credit report to find out what factors are hurting your score the most.

Having too much debt without enough available credit seriously influences your score. Try paying off as much debt as possible before asking for a lower interest rate.

Try Again

If you've asked for a lower score and were rejected, you should try again in the future. Interest rates themselves can change, and so can your financial situation. 

In the event that the lender denies your request for a lower interest rate, ask what the determining factors were in the decision. By doing so, you will know what you have to work on before submitting another application for a reduced interest rate.

Don't feel as though interest rates are destroying your financial situation. In many cases, you are not permanently locked into your current interest rate. Explore some possibilities for getting a lower rate either now or in the future.

3 Tips to Get the Lowest CA Loan Interest Rate

Mr. Ankush Tiwari, a Chartered Accountant by profession, had a long-cherished and an abroad family holiday pending! However, he was short on funds yet wanted to take a small break from his hectic schedule to rejuvenate! He was in a spot of bother as he needed around Rs.10 lakh to fund his trip.

He was almost to give up the idea when one of his other CA friends Vikram Taware informed him about availing a Chartered Accountant loan at a lower interest rate. He gave it a thought and found that he is eligible for it and applied for it. With a CA loan, he could enjoy his heart content with his family in Singapore.

If you are a CA and are willing to go on a foreign trip yet scared of the CA loan interest rate, you can implement some habits and avail a lower CA loan interest rate. Want to know more? Let’s go!

What is a CA loan?

A Chartered Accountant loan is nothing but a personal loan designed for CA professionals. Lenders consider CAs as respectable and responsible citizens of the society, and that’s why they are awarded a higher loan amount of up to Rs.35 lakh.

How to get the lowest CA loan interest rates?

The only thing that bothers a majority of CAs and ordinary citizens is a higher interest rate. However, there are ways you can bring it down and never feel the pressure. Here are those tips that you need to implement:

1. Always shop around a bit

Did you know that there are more than 100+ banks and non-banking finance companies (NBFCs) that offer loans in India? Thus, a borrower has many choices, and must not go to the first lender that confirms the eligibility. 

Thus, you should always compare leading offers on a third-party website as CA loan interest rate can vary between 14-20%. Comparing all offers beforehand will surely help you avail a lower rate of interest.

2. Maintain a good CIBIL score

A CA loan is an unsecured one which means you need not provide collateral as in the case of a home loan. Thus, a borrower’s Credit history becomes an important factor while deciding a CA loan interest rate. 

Aim to maintain a CIBIL Score of at least 700+ so that lenders could award you the best interest rate. Some of the things that you can do to maintain a good CIBIL Score are: 

• Paying your existing loan EMIs on time 
• Having a clean repayment history 
• Not having many credit cards 
• Not maximizing the credit card’s limit 
• Ensuring to get all Credit history mistakes corrected 

3. Opt for NBFCs over banks

A banks’ rate of interest may be lower, but their charge structure is heavy on the pocket of a borrower. NBFCs, on the other hand, also provide a lower CA loan interest rate along with a unique facility in the flexi loan. 

It allows a certain amount to be borrowed from a provided limit. The interest is paid as an EMI on the utilized amount and not on the total amount, making it easy to manage. The remainder of the amount is adjusted at the end of the tenor.

Don’t fear the CA loan interest rate

Thus, if you wanted to avail for a CA loan, but could not do so fearing the exorbitant CA loan interest rate, you can now do that by implementing the above-discussed tips. Incorporating these tips is easy, and it will help you avail a lower interest rate for CA loans without hassles.

The Bottom Line

Now that you have an idea of what it will take for a Chartered Accountant to grab the best CA loan interest rate - go ahead and make the most of it. Once you are sure that you are availing the best CA loan interest rate, apply for it online, and fulfill your needs.