Use your existing relationship with the bank if any

One more thing that reduces the cost of personal loan is getting it from your existing bank. If you have an existing relationship with a bank for over 6 months, the bank may extend relationship privileges to you. To retain customer loyalty the banks waive or reduce income document requirements, processing fees, administrative fees and can offer interest rates lower than those offered to non banking customers. The loan disbursal and approval is also faster in such cases.

Show them that you are credit-worthy

Showing your credit-worthiness can also give you bargaining power. Banks constantly look for people who take loans and repay them properly. This is a source of income for the banks and they also want hassle free income experience. So, if you have a credit card with good repayment record or have taken a loan previously and were prompt on repayments, banks will go that extra mile to have you as their customer. In exchange you can ask for good rates and lower processing fees and other costs.

The entire process of getting a good rate on your personal loan depends on how well you market yourself. Matching your profile with the right bank, completing the application formalities in a proper way with all essential documents and having a good credit history can save a lot of money on your personal loan.