Ways to reduce interest on a personal loan for a salaried individual

Meet Rohan, a 30-year-old software engineer from Mumbai. Like many salaried individuals, Rohan recently considered taking out a personal loan for a salaried individual to finance a long-awaited home renovation. While exploring his options, Rohan became concerned about the financial burden of the high rate of interest. He wondered how to reduce the interest rates on his loan and manage his finances more effectively.

Here are some practical strategies to minimise interest costs to individuals like Rohan (and you!). You can also learn about FIRSTmoney from IDFC FIRST Bank, a personal loan for both salaried and self-employed individuals. So, let's dive in!

Understanding the impact of high rates of interest
 

For salaried individuals, a personal loan offer is often a necessity. It is a quick and effective way for them to access funds for various needs, like home renovations, medical expenses, or travel. These loans come with a higher rate of interest compared to secured loans because they are unsecured and don’t require collateral.

This higher interest rate often leads to –

• Higher equated monthly instalments (EMI)
• Substantial financial outlay over the loan’s tenure
• Strain on your monthly budget
• Difficulty in sticking to long-term savings plans

Hence, understanding how the interest rate impacts your loan repayment is necessary for a personal loan for a salaried individual.

Practical strategies to reduce the rate of interest on personal loan
 

You can reduce the interest on your personal loan offer by employing some of the following strategies –

●  Improve your credit score

Lenders offer lower interest rates to individuals with higher credit scores. Check your credit report (CIBIL score) regularly and take steps to improve your score by paying bills on time and reducing outstanding debts.

●  Opt for shorter loan tenures

While longer tenures may lower your EMIs, they also result in higher interest payments. Hence, consider a shorter tenure for a personal loan for a salaried person to reduce the total interest paid.

●  Negotiate with your lender

If you have a strong and existing relationship with your bank or lender, negotiate for a lower interest rate or better terms.

● Prepay when possible

Whenever possible, make extra payments towards your loan principal. Since the principal reduces, the total interest payable also reduces. Just make sure there are no penalties for prepayments.

● Choose the right personal loan offer

Consider flexible loan options like FIRSTmoney, which has competitive rates and other benefits tailored for a smart personal loan for a salaried individual.

Introducing FIRSTmoney
 

FIRSTmoney is an innovative, smart personal loan for a salaried individual with a credit score of 730 or above. Once approved, you can avail of multiple loans as and when needed. It provides access to funds up to ₹10 lakh, allowing you to borrow money as needed for various purposes.

● Competitive rate of interest –

FIRSTmoney offers an interest rate starting at 10.99% p.a. on reducing monthly balances, which is lower than other personal loans for a salaried person.

● Flexible repayment terms –

You can choose an EMI repayment that suits your financial situation. This flexibility helps you manage your monthly budget more and understand how to reduce the EMI of an existing personal loan.

● Zero foreclosure charges –

Repay your loan early without additional foreclosure fees.

● Multiple loans –

Once approved, you can access multiple loans as needed, without applying from scratch.

● Quick approval –

The application process is entirely digital. You only need a physical PAN card for Video KYC when applying. The approval and disbursal of funds are swift, often within 24 hours.

How to apply for FIRSTmoney
 

To be eligible for FIRSTmoney, you must meet the following criteria –

• Be a salaried or self-employed individual aged 21-60 years
• Have a CIBIL score of 730 or above

To apply for a FIRSTmoney personal loan, follow these simple steps -

• Start by scanning the QR code or clicking loan from your smartphone
• Register using your mobile number and confirm basic/personal details to check your eligibility
• Select the loan amount of your choice and choose from flexible repayment terms
• Link your bank account where you wish the funds to be disbursed
• Complete the Video KYC verification process with your physical PAN card

Leveraging FIRSTmoney for your personal loan offer
 

FIRSTmoney is a powerful tool for a personal loan for a salaried individual. Its competitive interest rates, flexible repayment options, and easy application process make it an attractive borrowing tool. Whether you need funds for home improvement, travel, or emergencies, FIRSTmoney offers a convenient and cost-effective solution.

The takeaway
 

Getting a personal loan for a salaried individual involves careful planning and the right choices. Choosing FIRSTmoney can help you manage your loan and reduce financial stress. It is a smart, flexible financing that enables you to borrow efficiently and economically. Apply for FIRSTmoney today and take advantage of this opportunity to secure a personal loan that works for you, not against you.