What are the Important Points Which Helps to Negotiate the Personal Loan Interest Rate

What are the Important Points Which Helps to Negotiate the Personal Loan Interest Rate
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Negotiation involves two parties who hope to gain a middle ground on the issue at hand. A good negotiator always enjoys the maximum benefits of life. Even when it comes to the personal loan interest rate, negotiating will help you get lower interest rates.

Today, we are going to discuss a few topics which will help you get a lower interest personal loan in UAE.

Your Income:

When you apply for a personal loan in the UAE, the first thing that the financial institution checks is your monthly salary. That is done to make sure that you are financially capable of paying back the loan.

Having a higher amount of salary is an asset for you when it comes to personal loans. Higher the income you earn, the higher are the chances of you getting the lowest interest personal loan in UAE.

As it is, the personal loan interest rate decreases for the customers in the higher income bracket.

Your History of Repayment:

Your repayment history is another factor that plays a major part in lowering the interest rate of the personal loan. The repayment history shows the financial institutions how dedicated are you when it comes to repayment.

A Credit report indeed plays the most important part when it comes to personal loan eligibility. However, if you don’t have a good repayment history, it will affect the negotiation for the lowest interest personal loan in UAE.

Defaults:

Any history of defaults can result in getting your application rejected in the UAE. If you are lucky enough to not get rejected, then you’ll be charged a high interest rate for the loan.

Lenders see a defaulter as a high-risk customer.

Credit History:

The most important factor when you are being considered for the personal loan is your credit history.

A credit history shows the history of the customer’s repayment behavior.

You will need a good credit history to qualify for a personal loan in the UAE. Credit history also plays an important role when it comes to getting the lowest interest personal loan in UAE.

Relationship with your Bank:

Customers who have an account with the bank are already at an advantage. Banks take into consideration their customers’ loyalty when it comes to the personal loan interest rate.

If you have been with the bank for a long time, banks will try to offer their best. They do not want to lose out on a loyal customer.  And that is your leverage. Use that to get the lowest interest personal loan in UAE.

The Reputation of your company:

The reputation of your company is another factor that will affect the personal loan interest rate in the UAE. The fact whether your company is listed with the bank or not also matters.

Employees of influential companies will enjoy lower personal loan interest rates in the UAE, compared to their less influential counterparts.

The reason for that is that the banks perceive employees of influential companies less of a risk factor. While employees of lesser-known companies are seen as a high-risk customer.

Over to You

If you are planning to apply for a personal loan in the near future, you should be mindful of your credit score. It is the most important factor that will affect your eligibility and the personal loan interest rate in the UAE.

There are five factors that can make or break your credit report. These factors are the following:

  • Your payment history
  • Debt Burden Ratio
  • Length of your credit history
  • Type of credit
  • Recent credit applications

A Credit score will play an important role when you are negotiating for the lowest interest personal loan in UAE.

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