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How Much Personal Loan Can I Get in India? (2024)
Looking how much personal loan can u get in India? Read through this article!
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Have you ever felt a cash crunch because of the increasing prices of the products or increasing demands? Did you ever feel like asking for a loan, but the tedious and complex process of availing the same stopped you from moving ahead? If you answered yes, then you are at the right place. In this article, our experts will provide you with information regarding how much personal loan you can get in India and the associated terms and conditions about several the same. Keep scrolling to stay informed.
A personal loan is an unsecured loan that can cover a wide range of expenses like education, marriage, health expenses, etc. There is no requirement for collateral to obtain this loan, but the risk associated with such a loan for the lenders is higher than that of a secured loan. According to data published by the Reserve Bank of India, the amount of money taken from personal loans has climbed dramatically in recent years. As of June 2018, personal loan borrowings totalled a whopping Rs. 19.33 lakh crore, up from Rs. 5.89 lakh crore in 2010.
But where can you get such a loan?
A personal loan can be availed from a bank or NBFC by visiting the nearest branch. However, an easier process to avail of the same is through online lending applications.
like IndusInd bank and PaySense.
Moving forward in this article, our experts have tried to solve various doubts and questions when customers consider how to get a personal loan in India.
Features of a Personal Loan
Types of Personal Loans
How much personal loan can I get in India?
How can I get a personal loan in India?
Documents required for getting a personal loan
Factors to be considered while applying for a personal loan
Eligibility for applying for a personal loan
How can I improve my eligibility for a personal loan?
What is a personal loan eligibility calculator?
How is the personal loan amount calculated?
How is the personal loan interest amount calculated?
How is a personal loan repaid (along with interest) - an example?
What charges do you need to pay while getting a personal loan?
How can you repay your personal loan?
What is to be done after closing a personal loan?
Frequently Asked Questions
The Bottom Line
IndusInd bank and PaySense is a financial services startup having highly diverse, like-minded people who solve the fundamental problem of providing simple, convenient, and transparent access to credit in India using advanced data sciences to avoid the hassle of complex application processes, arduous physical proofs, and long waits.
Mentioned below are some of the features that shall help you understand personal loans better:-
A personal loan does not require any collateral or security. It is based on your creditworthiness and employment profile reflected by your credit score
There is no end-use monitoring by the banks on the amount disbursed as a personal loan
There is a flexible tenure of repayment as per your requirement that ranges between 1 month to 60 months
A personal loan can be availed with minimal documentation (explained later in this article)
The amount of a personal loan gets credited to your account within 48 hours to 72 hours
Personal loans can be availed for any legal purpose in India. Based upon the utilisation, there are various types of the personal loan like:-
Wedding Loan: Personal loans that help you make your or your child’s wedding memorable without worrying about the associated expenses.
Travel Loan: A loan that helps you to meet all the expenses related to vacation and pay the amount later.
Home Renovation Loan: A personal loan to help you manage the costs of repairing, buying new material, labourer’s charges, etc. while home renovation.
Pension Loan: Loans for retired people to help them meet medical or daily expenses.
Education Loan: A loan covers tuition fees, hostel fees, and all the other expenses related to education, either in India or abroad.
Consumer Durable Loan: Loans for people who want to buy white goods or any electric device.
To help you understand this crucial segment properly, we have created a table that showcases the information on some of the best platforms in India to apply for a personal loan.
Banks/NBFCs
Name
Interest Rate (p.a.)
Loan Amount (Rs.)
EMI/1 lakh for 1 year (Rs.)
UCO Bank
8.45% onwards
Up to 10 lakh
8,720
Central Bank of India
8.45% onwards
Up to 20 lakh
8,720
Union Bank of India
8.90% onwards
Up to 15 lakh
8,741
IDBI Bank
9.50% onwards
25,000 to 5 lakh
8,768
State Bank of India
9.60% onwards
Up to 20 lakh
8,773
HSBC
9.75% onwards
Up to 30 lakh
8,780
Citibank
9.99% onwards
Up to 30 lakh
8,791
Kotak Mahindra Bank
10.50% onwards
Up to 30 lakh
8,803
Federal Bank
10.49% onwards
Up to 25 lakh
8,814
ICICI Bank
10.50% onwards
50,000 to 25 lakh
8,815
11.00% onwards
50,000 to 15 lakh
8,838
IDFC First Bank
11.00% onwards
Up to 40 lakh
8,838
Axis Bank
11.00% onwards
Up to 15 lakh
8,838
Standard Chartered Bank
11.00% onwards
1 lakh to 50 lakh
8,850
HDFC Bank
12.50% onwards
Up to 25 lakh
8,908
Mobile Applications/Websites
Name
Interest Rate (p.a.)
Loan Amount (Rs.)
EMI/1 lakh for 1 year (Rs.)
10.49% p.m
30000 to 5 lakh
9,073
16.80% onwards
5000 to 5 lakh
9,111
Bajaj Finserv
11.49% onwards
Up to 15 lakh
8,861
StashFin
11.99% onwards
1000 to 5 lakh
8,884
Faircent
12.00% onwards
Up to 10 lakh
8,885
Kreditbee
12.24% onwards
1000 to 2 lakh
8,896
MoneyTap
12.96% onwards
3000 to 5 lakh
8,930
Fullerton India
13.00% onwards
Up to 25 lakh
8,932
Money view
15.96% onwards
5000 to 5 lakh
9,071
EarlySalary
18.00% onwards
Up to Rs. 5 lakh
9,168
Home Credit
24.00% onwards
Up to 2.4 lakh
9,456
CASHe
33.00% onwards
6000 to 4 lakh
9,897
HDB
Up to 36%
Up to 20 lakh
10,046
NAVI
9.99% onwards
up to Rs 20 lakh
4,680
If you are looking to obtain a personal loan physically by visiting the bank/NBFC branch, then you are supposed to carry all the required documents (as stated in the next segment of this article) and look out for the loan manager. Fill in the given form and submit it back to the bank as instructed by the manager. Your loan shall be approved if you fulfil all the criteria.
However, if you are looking to get a loan online using any of the applications mentioned above, then the common process goes as follows:
Step 1: Do a thorough comparison of the various applications and their T&C
Step 2: Register as a new user and fill in all your details in a proper manner
Step 3: Submit your bank details, PAN details, and other documents to verify your identity and eligibility
Step 4: Once your ID is created, scroll through the various offers available of the application and choose the one that suits you the best
Step 5: Finally apply for the loan and make sure to do timely repayments to avoid negative consequences
Generally, you require the following documents while availing of a personal loan. This is an exhaustive list, so our experts always advise the readers to clearly understand the documentation process from the website to avoid any negative consequences.
Requirements
Salaried Individuals
Self Employed
Proof of Identity
Passport, Voter’s ID, Driving License or PAN Card
Passport, Voter’s ID, Driving License or PAN Card
Proof of Residence
Passport or utility bills
Passport or utility bills
Proof of Income
Bank statement of salary account for the past two years
Audited financial statements for the past two years
However, if you are an NRI looking out for a personal loan, you will require a little different set of documents as mentioned below:-
Copy of your passport
Visa copy
Your official email ID or the email ID of the HR
Bank statements
Salary certificate or salary slips
NRO/NRE bank statements of the last 6 Months
Proof of identity, residence, income, and assets
Recent passport-size photographs of yourself and the guarantors
Some of the factors that are to be considered while applying for a personal loan are as follows:-
Geographic location: The area where the loan is being availed plays a crucial role in determining whether you will qualify for a personal loan.
Income: The higher your income, the higher the loan amount you will be eligible for.
Housing situation: Having your own house increases your chance of getting a loan.
Existing credit: In case you already have a personal loan running, your chances of getting a new loan will be lower.
Company: The company you work for will determine whether you get a personal loan.
Credit history: Your credit score and credit history impact your personal loan eligibility as the interest rate, tenure, and loan amount; everything depends on this factor.
Interest Rate: Choose a personal loan with the lowest interest rates. A calculation was showcased later in this article to help you understand how important it is to go for a low-interest rate scheme.
Processing Fees: Look out for a personal loan that offers Nil or nominal processing fees.
Part-payment & Foreclosure Charges: A loan is like a burden on your pockets, and people always tend to repay it as soon as possible. Therefore, choose a personal loan that reduces the prepayment or foreclosure charges.
Flexible Repayment Tenure: Choose a personal loan that offers a flexible range of repayment from 12 to 60 months.
Quick Disbursal: Our experts recommend looking for simple documentation and a quick disbursal process to avoid hassle.
The general requirements and limits to applying for a personal loan are outlined below:-
Criteria
Salaried
Self-Employed
Age
21 years to 60 years
22 years to 68 years
Employment Status
Must be employed for at least 6 months
Must be in business for at least 2 years
Net Monthly Income
Rs. 5,000 and above
Rs.25,000 and above
CIBIL Score
Above 750
Above 750
Maximum EMI
Up to 65% of the income
Up to 65% of the income
Some of the ways to improve your chances of getting a personal loan are as follows:-
Credit clean-up: The main consideration by the lenders is the credit score. Higher the credit score, the more the chances to get a personal loan.
Rebalancing your income and debts: Ascertain your debt-to-income ratio and try to improve this by selling liquid assets or earning more through a part-time job.
Consider co-signers/guarantors: Adding a co-signer or guarantor with a good credit score guarantees that you will repay the loan and considerably increases your chances of getting a personal loan.
Limit Your Borrowing: Borrow only the amount you require and that you can repay after considering the interest.
Choose the Right Lender: Every lender has its own requirements. So, check their eligibility criteria thoroughly.
Some lenders offer applicants an online personal loan eligibility calculator that helps them to determine their eligibility for a personal loan by analysing the following:-
Monthly Income
Loan Amount
Occupation
Desired Loan Tenure
These personal loan eligibility calculators show results regarding the eligible loan amount, tenure, etc., and indicate whether you will qualify for a personal loan.
The amount that you can get when you apply for a personal loan is calculated using any of the below mentioned two methods:-
1. Multiplier Method: A popular method used by banks and financial institutions where they consider factors like salary, the reputation of the company, etc. These factors increase the multiplier, so there are greater chances of a higher loan at a lower interest rate.
For example, consider how much a personal loan can get on a 30,000 salary. Then, you can multiply your monthly salary by 27 to get the maximum loan amount, provided you do not have any other EMI running. So, you can avail of a personal loan of Rs. 8,10,000 with a tenure of 60 months. Similarly, considering some common salary figures, we have created the table below.
2. Fixed Obligation Income Ratio: This method derives the value based on the maximum instalments you can pay your net income post expenses. In most cases, lenders consider 50-75% of the net income as instalments.
For example, if we consider a personal loan for an individual earning Rs. 30,000, he/she can go for an EMI of Rs. 8,000 to get a personal loan of up to Rs. 5.5 lakh. But, if the monthly EMI that he/she is paying is lower, let’s say ₹3,000, then the eligible amount for the personal loan will be higher (up to Rs. 7.7 lakh) – assuming your credit rating is healthy and you are looking for a 60 months tenure loan.
The interest amount on the personal loans can be calculated in the following two ways:
Flat Rate Method: In this method, interest is calculated at a fixed rate on the total loan amount initially borrowed over the entire tenure of the loan.
Reducing Balance Method: In this method, the monthly EMIs that you are paying consist of parts of the loan amount and the interest component. Thus, the principal loan amount keeps on decreasing and the interest is calculated on this decreasing loan amount.
Assuming you are a resident of Bengaluru and an employed individual who draws a monthly salary of Rs.25,000. Suppose you avail of a personal loan of Rs.3 lakh for 5 years at a rate of interest of 14.80% p.a. So, your amortisation schedule will look something like this:
Loan Amount
Rs.3 lakh
Processing Fee
2%
Loan Tenure
5 years or 60 months
Rate of Interest
14.80% p.a.
Month
Principal Paid (A) (Rs.)
Interest Paid (B) (Rs.)
Total Payment (A+B) (Rs.)
Outstanding Loan Balance (Rs.)
1
3,406
3,700
7,106
2,96,594
2
3,448
3,658
7,106
2,93,147
3
3,490
3,615
7,105
2,89,657
4
3,533
3,572
7,105
2,86,124
5
3,577
3,529
7,106
2,82,547
6
3,621
3,485
7,106
2,78,926
7
3,665
3,440
7,105
2,75,261
8
3,711
3,395
7,106
2,71,550
9
3,756
3,349
7,105
2,67,794
10
3,803
3,303
7,106
2,63,991
11
3,850
3,256
7,106
2,60,142
12
3,897
3,208
7,105
2,56,244
13
3,945
3,160
7,105
2,52,299
14
3,994
3,112
7,106
2,48,305
15
4,043
3,062
7,105
2,44,262
16
4,093
3,013
7,106
2,40,169
17
4,143
2,962
7,105
2,36,026
18
4,195
2,911
7,106
2,31,831
19
4,246
2,859
7,105
2,27,585
20
4,299
2,807
7,106
2,23,287
21
4,352
2,754
7,106
2,18,935
22
4,405
2,700
7,105
2,14,530
23
4,460
2,646
7,106
2,10,070
24
4,515
2,591
7,106
2,05,555
25
4,570
2,535
7,105
2,00,985
26
4,627
2,479
7,106
1,96,358
27
4,684
2,422
7,106
1,91,674
28
4,742
2,364
7,106
1,86,933
29
4,800
2,306
7,106
1,82,133
30
4,859
2,246
7,105
1,77,274
31
4,919
2,186
7,105
1,72,354
32
4,980
2,126
7,106
1,67,375
33
5,041
2,064
7,105
1,62,333
34
5,103
2,002
7,105
1,57,230
35
5,166
1,939
7,105
1,52,064
36
5,230
1,875
7,105
1,46,834
37
5,295
1,811
7,106
1,41,539
38
5,360
1,746
7,106
1,36,179
39
5,426
1,680
7,106
1,30,753
40
5,493
1,613
7,106
1,25,260
41
5,561
1,545
7,106
1,19,700
42
5,629
1,476
7,105
1,14,070
43
5,699
1,407
7,106
1,08,372
44
5,769
1,337
7,106
1,02,603
45
5,840
1,265
7,105
96,763
46
5,912
1,193
7,105
90,851
47
5,985
1,120
7,105
84,866
48
6,059
1,047
7,106
78,807
49
6,134
972
7,106
72,673
50
6,209
896
7,105
66,464
51
6,286
820
7,106
60,178
52
6,363
742
7,105
53,815
53
6,442
664
7,106
47,373
54
6,521
584
7,105
40,852
55
6,602
504
7,106
34,250
56
6,683
422
7,105
27,567
57
6,766
340
7,106
20,801
58
6,849
257
7,106
13,952
59
6,933
172
7,105
7,019
60
7,019
87
7,106
0
Some of the usual charges that you are supposed to pay on a personal loan are as follows:-
Processing fee
Goods and Services Tax or GST
Verification charges
Charges levied for issuing a duplicate statement
Penalty for defaults
Penalty for pre-payment and part payment of the loan
Charges for documentation, stamping, credit administration, collection, etc.
There are several repayment modes offered by lenders to pay your EMIs. Some of the most common methods are:-
Electronic Clearance System or ECS refers to the electronic transfer of funds from one bank to another using RTGS/NEFT/IMPS.
Post Dated Cheques or PDCs: Cheques issued by you for a future date in the lender's name to allow them to encash the amount mentioned on the cheque.
National Automated Clearing House: NACH allows real-time transactions processing using UPI IDs.
Debit mandate or standing instruction: You can instruct your bank to debit a particular amount to another bank or bank account at regular intervals.
Whenever you are deciding to close your personal loan, you should look at these things:-
Pre-closure charges: The prepayment charges generally range to 5% of the outstanding balance. However, some banks/NBFCs/applications offer Nil charges on prepayment under special schemes.
Obtaining NOC: No Objection Certificate proves that you have cleared all the dues and that there is no outstanding balance to pay.
Obtain all your original documents: Ensure to take back all your documents while closing the account.
Ensure updating of your CIBIL Score: Once the loan is fully repaid, the bank updates your loan repayment action in the CIBIL database.
The answer to this question would depend on several factors. However, assuming a 60-month tenure and a 10% interest rate, your EMI would be Rs. 42,494. You can use the various EMI calculator available online to calculate the amount based on some other inputs. We have also shown the calculation above in this article.
The loan amount is calculated using either the multiplier or fixed obligation income ratio method. The amount of interest is calculated using the flat rate or reducing balance method.
Our experts recommend going to a private bank for a loan because of their timely services and appropriate know-how. However, if you wish to save on interest, you can go to any public sector bank. If the amount is small and eligible to be availed from an online application like IndusInd bank or PaySense, this is the best option, as you will require minimum documentation. The process is also straightforward and quick in the case of such applications.
Using the multiplier method, as shown above, you can avail yourself a maximum amount of 27 times your salary i.e. Rs. 8.1 lakhs. However, if you go for the other method i.e. fixed obligation income ratio method, then your maximum amount will depend upon your EMI amount. At the same time, various other factors also play an important role in deciding the maximum amount of personal loans (as stated in Topic 6).
A home loan is a kind of personal loan only and the same logic applies in this case too as mentioned in question 4. Going by the multiplier method, the maximum amount will be Rs. 10.4 lakhs, whereas going by the fixed obligation income ratio method, this amount might differ because of several other factors.
We hope this article was elaborative to guide our readers through the entire process of obtaining a personal loan in India. Please note that the above information is unbiased and does not support any particular process. This guide was an extensive and exhaustive guide of the general know-how for the availing of a personal loan. However, specifics of this information might change from bank to bank, NBFC to NBFC, and application to application. Therefore, our experts recommend cross-checking the details and being 100% sure about the various factors before you apply for a personal loan.
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