17 February, 2025 | 11:00 IST
Personal loans could be helpful to meet unexpected large-scale spending. The instant loan apps have made it easier to apply for a personal loan and receive the money within minutes, especially when you are running short of cash. With a wide range of personal loans being offered by banks and non-banking financial companies (NBFCs), it could be a difficult choice to select the suitable offer as per your needs. The most important factor is to choose the right borrowing amount with an affordable interest rate and a flexible repayment plan.
The amount you want to borrow largely depends on factors like your monthly income, credit score, and current loan obligations. Most lenders generally take the credit score and income into account while processing the loan application. A healthy credit profile with a stable income may help you in securing a higher loan amount.
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A personal loan is a type of unsecured loan that individuals can borrow from banks, other financial institutions, or online lenders to meet various needs. Unlike home or car loans, personal loans don’t require collateral, making them a convenient option for emergencies, medical expenses, weddings, vacations, or debt consolidation.
The approval process is usually quick, with flexible repayment tenures and interest rates. However, the loan amount, interest rate and repayment conditions may differ from lender to lender and the credit profile of the borrower.
You can explore multiple loan offers through digital lending platforms like the Moneycontrol app. As many as eight lenders offer multiple personal loans through the Moneycontrol app and website. You can borrow up to Rs 50 Lakhs and the interest rates start at as low as 10.5% per annum. It’s a 100% digital process and there is no need of providing any collateral.
If you are looking forward to a higher loan amount here are the key factors to consider.
Your existing loans and credit usage across different instruments like pay later accounts, credit cards and overdraft facilities may also affect the total amount you can borrow. The lenders, generally, take into account two factors while deciding the loan amount.
Income-based eligibility
Lenders often determine the loan amount based on a multiple of the applicant's monthly income. Some banks offer loans up to 20 times the monthly income. So an individual with a monthly income of ₹50,000 might be eligible for a loan of up to ₹10 lakh.
Impact of credit score
A higher credit score enhances loan eligibility and may lead to more favourable terms. For example, a lender may require a minimum credit score of 750 for personal loan applicants.
ALSO READ: Is personal loan expensive? Here’s what you must know about personal loan cost
You can increase your personal loan limit by improving your creditworthiness and financial profile. Here are some effective ways:
Improve your Credit Score
Increase your Income
Choose a longer repayment period
Lower your debt-to-income ratio
Apply with a co-applicant
Maintain a good relationship with your bank
ALSO READ: What is the average credit score in India and how to improve your credit score
To conclude, availing a personal loan is not difficult these days with the emergence of instant loan apps and digital lending platforms. However, the amount you can borrow depends on multiple factors. Your credit profile and the capacity to repay the loan could be crucial if you are looking for a higher loan amount. A little financial discipline and a few simple steps in managing money can help you in getting approval for a higher loan amount.
You can check personal loan offers up to Rs 50 Lakhs from eight lenders on the Moneycontrol app. The interest rates start at as low as 10.5% annually and the application process is 100% paperless.
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