How to Qualify for a High-Value Personal Loan

Imagine needing a personal loan of ₹10 lakh to start a dream venture or handle an emergency. You plan everything, but the bank declines your application. Why? Your credit score was a bit low, or your income didn’t meet their criteria.

This scenario is all too common in India’s personal loan market, which is projected to grow from USD 8.34 billion in FY2024 to USD 54.86 billion in FY2032, at a CAGR of 26.55%.

For a ₹ 10 lakh personal loan with an interest rate of 12% for five years, your EMI would be ₹ 22,244. That’s manageable if you qualify, but how do you get there? This blog will walk you through the process step-by-step.

Understand What Lenders Want

Lenders look at three main things:

1. Credit Score: Your score tells the lender how trustworthy you are. For a ₹10 lakh personal loan, aim for 750 or higher.
2. Income Stability: Most lenders expect a minimum monthly income of ₹30,000 for high-value loans. They’ll also check if you have steady employment or consistent business profits.
3. Debt-to-Income Ratio (DTI): This shows how much of your income goes toward debt repayment. A DTI below 40% is ideal.

Example: If you earn ₹ 50,000 per month and already pay ₹ 15,000 in EMIs, your DTI is 30%. This makes you a safer bet for lenders.

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Build a Strong Financial Profile

Think of your financial profile as your CV for loans. Here’s how to strengthen it:

1. Boost Your Credit Score: Pay bills on time, clear outstanding dues, and avoid taking too many loans.
2. Reduce Debt: If you’re paying high-interest credit card dues, try consolidating them into a single low-interest loan.
3. Show Stable Income: Stick to one job for at least a year before applying. Freelancers or business owners should show consistent profits for at least two years.

Compare Lenders: Choose Wisely

Here’s a quick comparison of personal loan offers:

Bank/Lender	Interest Rate (per annum)	Processing Fee	Minimum Income Required	Tenure
SBI	10.50%	₹2,500	₹30,000	Up to 5 years
HDFC Bank	11%	₹3,000	₹25,000	Up to 5 years
ICICI Bank	11.50%	₹2,000	₹35,000	Up to 5 years
Bajaj Finserv	13%	₹1,500	₹20,000	Up to 6 years
Axis Bank	12.50%	₹2,500	₹25,000	Up to 5 years

Compare rates, fees, and income requirements before applying.

Apply Strategically

Timing and strategy can make or break your application.

• Pre-Qualification Tools: Use tools online to check if you’re eligible for a ₹10 lakh personal loan without affecting your credit score.
• Avoid Multiple Applications: Too many applications in a short time lower your credit score.
• Check Your Paperwork: Ensure your Aadhaar, PAN, salary slips, and IT returns are up-to-date and accurate.

Consider Adding a Co-Signer

Struggling to qualify alone? A co-signer can help.

• A co-signer with a high income or excellent credit score improves your chances.
• They also reduce the interest rate in many cases.

However, remember: Your co-signer is equally responsible for repaying the loan.

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Other Tips to Strengthen Your Application

• Opt for a secured loan if your income is lower than required. Use assets like fixed deposits or property as collateral.
• Borrow only what you can repay comfortably.
• Use a loan calculator to estimate your monthly EMIs and ensure they don’t exceed 40% of your income.

Conclusion

Securing a ₹10 lakh personal loan may seem daunting, but it’s possible with the right preparation. Understand lender expectations, build a strong profile, and apply strategically. Remember, financial discipline is key. 

So, are you ready to make your dream loan a reality?

FAQs

1. What is the minimum salary required for a ₹10 lakh personal loan?
₹30,000 per month is typically required, but it varies by lender.

2. Can I get a ₹10 lakh personal loan with a 700 credit score?
It’s possible, but you may face higher interest rates. Aim for 750+ for better terms.

3. Is a co-signer necessary for a ₹10 lakh personal loan?
Not always. A co-signer is helpful if your credit score or income is low.

4. How do I reduce my EMI for a ₹10 lakh personal loan?
Choose a longer tenure or negotiate for a lower interest rate.