If you are in urgent need of money, a personal loan is the way to go. Compared to credit card finance, etc, personal finance is the best option to go for.
Personal finance will provide you with a higher finance amount, longer repayment tenure, lower interest rate, etc. That is if you are eligible for it.
However, if you qualify for personal finance, you will want a lower interest rate on the Finance amount. After all, an interest rate is the additional money you pay from your pocket to the bank. And to get that deal, you will have to negotiate with the loan provider.
Therefore, we have discussed the factors that will help you with the negotiation process. These factors will help you get a better deal on the interest rate.
Your Credit Score
A credit score is like a full-body scan of your financial health. It determines whether you are financially capable of repaying the debt.
Credit scores are marked between 300 – 900 in the UAE. The greater credit score you have, the higher are the chances of you getting a finance amount. Also, if you have a high credit score, you have better chances when it comes to negotiation.
We have often mentioned the credit score, but do you know how to maintain a good credit score. If you don’t, here is what you should do.
To maintain the high credit score, you will have to:
- Stay within the Credit limit
- Pay your credit card bill on time
- Avoid paying the Minimum amount of the credit card bill
- Always pay your bill in full, if possible
- Manage your debt
Additionally, you should always keep an eye on your credit score. If you find any suspicious activity in your account, report it immediately. Negligence or procrastination will only damage your credit score.
Compare the Personal Loan Providers
Comparing personal finance providers is essential for your financial health. A little effort and research from your end will ultimately benefit you.
Lenders that provide the lowest interest rate for personal loan in UAE might not always be perfect for you. Make sure to always compare the interest rate, eligibility, repayment tenure, and the finance amount.
After all, every financial institution has its pros and cons. Therefore: Research. Compare.
Your Professional Credential
If your company is listed with the bank and you earn a high income, it makes you a perfect customer. The financial institutions in the UAE consider customers like you a stable candidate. You represent low-risk factors in the eyes of the lender.
You can definitely use that factor to negotiate a better deal for the personal loan interest rate in uae. Since the lender is assured of your repayment capability, they will offer a better interest rate to seal the deal.
Healthy Record of Debt Repayment
Maintaining a healthy record of debt repayment implies that you have always repaid your debt in time. It helps build trust in you, amongst the financial providers. This will end up affecting your credit score in a positive way.
If you have an unhealthy record in debt repayment, it will cause hesitation amongst the lenders to finance you. Most financial institutions will end up rejecting your application. Even if your application is approved, you will be offered a high interest rate on personal credit.
Comprehending the Terms and Conditions
It’s no secret that most customers skim through the fine print due to its length. And that is a big mistake. It is essential that you read and comprehend the terms and conditions associated with the personal loan.
Reading and understanding the fine print will protect you against any unpleasant surprises in the future.
Collateral
It is true that personal credit is collateral-free. However, the lack of collateral affects the interest rate on personal loan. This is due to the fact that the lenders have no way of recovering if the customer is unable to repay the amount.
Henceforth, you can offer collateral to reduce the interest rate of the personal credit. If the financial institution accepts the collateral, you can enjoy a much lower interest rate, as there is no risk involved.
Special Offers
Finance institutions in the UAE often come up with special offers during the festive season. It is due to the fact that many need financial help during the festive season. These offers can often help lift the burden of the festive season in your pocket.
The special offers during the festive season would often involve lower interest rates in the UAE. Hence why it can be beneficial for you to go for the personal credit during the festive season, if need be.
Over to You
If you use the suggestions given above, it won’t be difficult to get a lower interest on the financed amount. Make the most of your privileges. Use the status of your employment and the credit score to score a better deal.