According to a RICS Knight Frank report, around 30% of Indians in tier 1 and tier 2 cities live on rent. As renting has become the go-to approach for professionals across the country, especially those who shift cities frequently owing to better work opportunities, it is crucial that you know how you can make the experience more pocket-friendly. For instance, financing options like a personal loan for security deposit, which is also known as a Rental Deposit Loan, make the move a lot easier.
Apart from the fact that it is extremely hard to find suitable places to live in within the city, as a tenant, you also have to account for the additional costs associated with renting. Among the biggest hurdles is the demand for at least 6 month’s rent as security deposit in cities like Mumbai. Here, the deposit for a 1BHK apartment alone can amount to Rs.1.78 lakh. However, this amount is just one major expense. You also need to account for relocation costs, brokerage fees and rent agreement registration as well as other moving and transport costs.
Thankfully, getting the right personal loan for security deposit can help you tend to these expenses easily and conveniently. That said, your goal should be to get the best deal possible when borrowing a loan to make repayment stress-free. As it a type of personal loan, there are ways to secure better interest rates for this financial offering. To know all about them, read on.
Have a high credit score
One of the best ways to negotiate a better interest rate is to maintain a high credit score, ideally above 750. This indicates that you are a creditworthy individual and that you have ample experience with handling debt. It also shows that you’re responsible with your finances and can repay debt on time, thereby posing little to no risk to a lender.
Secure employment at a reputed company
Another great way to get a better interest rate on a personal loan for security deposit is to work at a reputed company. Lenders often analyse your employer’s reputation before approving you for a loan as it is a part of your total risk analysis. By doing this, the lender has assurance that you will be able to make monthly payments as you’ll receive your salary on time. To add to this, maintaining a stable employment history also helps you secure a nominal interest rate on a rental deposit loan as it shows financial stability.
Inquire about the lender’s interest calculation method
An effective way to get a better interest rate is to inquire about the interest calculation method used by the lender. There are usually two main ways in which this is carried out: flat rate and reducing balance method.
In case of the former, the total interest payable is fixed and is based on the original sanction amount. On the other hand, with the reducing balance method, the interest amount is revised as a portion of the principal gets paid. Here, the interest outgo is lesser with each passing month. This means that a loan offered at 9% interest with the flat rate method may end being costlier than a loan offered at 10% interest with the reducing balance interest calculation method.
Choose the right lender
In addition to these approaches, opting for the right lender is also vital to getting a good deal. This is where the Bajaj Finserv Rental Deposit Loan stands out as it offers a high-value sanction of up to Rs.5 lakh in Mumbai and up to Rs.3 lakh in other cities at a competitive interest rate. In addition, you can opt for a flexible tenor of up to 36 months and also enjoy 24-hour loan disbursal!
Other notable features include doorstep service in Mumbai and Pune, through which drafting and registering the rent agreement is taken care of for you. Further, you can also avail the My Home cover by Bajaj Allianz for added security.
While eligibility terms are simple and document requirements are minimal, you can get a personal loan for a security deposit on customized terms when you check your pre-approved offer online.