Factors affecting Personal Loan amount

How a financial institution determines how much loan to give you, continues to be a subject of mystery. We want to demystify this world for you and introduce you to a few factors that you will need to keep track of to enjoy higher loan amount sanctions.

A range of demographic details goes into calculating your loan eligibility and amount.

1. Age: Lenders usually offer personal loans to individuals who are between 20 to 70 years of age. For us, the range is 21 years to 80 years*.
2. Monthly income: As a matter of fact, the higher your monthly income, the higher will be your sanctioned loan amount.
3. City of residence: Your loan amount could vary from city to city. The reason for this is that in most cases, the salaries in larger cities are more than those in small towns.
4. Monthly expenses and loan repayments: Your total monthly outflow of loan expenses gives an idea of how much money is already committed and cannot be used to repay additional instalments. This ratio is your debt-to-income ratio. The lower the ratio, the higher the sanctioned loan amount, and vice versa.
5. Credit score: Your credit score is the single most important factor for the lender. A higher credit score not only improves the probability of your getting a loan but also a higher sanctioned amount. We have a CIBIL Score threshold of 685 or higher for our loan applicants.
6. Repayment history: Paying your ongoing EMIs on time is a healthy practice and shows your financial discipline. When you pay your EMI on time, your credit score is impacted positively, and vice versa.
   

We have a host of useful tools that you can use to find out your loan eligibility, starting with our online personal loan eligibility calculator.