How to get a 10 lakh personal loan? A step-by-step guide | Mint

Personal loans are a popular way of borrowing temporary funds to pay for unexpected expenses. These loans offer instant disbursement and do not require collateral. Thus, even if you do not have an asset, you can apply for a personal loan and fulfill your financial needs.

If you need ₹10 lakh and are thinking of borrowing a personal loan, you must know the documents and eligibility criteria for the same so that you can explore different options and get the best deal for yourself.

Eligibility criteria for ₹10 lakh personal loan

Note: The eligibility criteria may vary depending on your overall credit profile. Hence, for the latest updates visit your desired bank’s website.

Nationality: You must be an Indian citizen.

Age requirement: Minimum 21 years at the time of application, maximum 67 years at loan maturity.

Income: Minimum monthly income of ₹15,000.

Employment: You are eligible for the loan if you are a salaried employee (private sector/public sector) or self-employed with at least 1 year of work experience.

Credit score: A score of 750 or above improves chances of approval at lower interest rates.

Documents required for ₹10 lakh personal loan

Note: Banks may require additional documents based on your overall credit profile as well as the amount you require as loan.

For salaried employees:

• PAN card
• ID proof (Aadhaar, Passport, Voter ID, etc.)
• Signature proof
• Address proof
• ITR/Form 16
• Bank statements (last 6 months)
• Salary slips (last 3 months)

For self-employed individuals:

• ITR for the last 2 years
• Profit & Loss statement, balance sheet, and income computation (last 2 years)
• Form 26AS, Income Tax Challan, or TDS certificate (Form 16A)
• Business proof (registration certificate, GST certificate, etc.)

Factors affecting your ₹10 lakh personal loan application

Credit score: A credit score of 750 or above increases the chances of approval and helps you get low interest rates. However, a lower score may result in rejection of your application.

Income: A steady income, along with ample disposable funds reflects a strong credit profile.

Occupation: Lenders prefer applicants who are working in reputed and stable organisations as it proves career stability and regular income flow. An unstable employment can reduce your approval chances.

Debt to Income ratio: This ratio helps lenders evaluate your financial condition. It is important that you do not exceed this ratio above 30% as this will reduce your approval chances.

(Rates as of 10 February, 2025)

In conclusion, personal loans offer higher interest rates than other loans in the market. Hence, it is important to explore other options before you decide on getting one. You must also make sure that you plan your repayment thoroughly before applying for the loan so that you do not end up in a debt trap and make a default in your repayment. Even a single missed repayment can deteriorate your credit score.

(Note: Raising a loan comes with its own risks. So, due caution is advised)