How to Get Personal Loan of Rs. 20 Lakh

Banks and NBFCs offer personal loans for amounts ranging from Rs 10,000 to Rs 40 lakh. Whether individuals looking for a personal loan of Rs 20 lakh will get the same amount or not will depend on various factors including their monthly income, existing loan repayment obligations and EMI/NMI ratio — the proportion of your net monthly income spent on servicing your existing EMIs as well as the EMI of the new loan. Most lenders prefer sanctioning personal loans to applicants whose total EMI/NMI ratio (including the EMI of the proposed loan) is 50-55%. Other factors that would influence your personal loan approval process include your credit score, occupation and employer’s profile. Some lenders also offer pre-approved instant personal loans to their existing customers.

Points to note before applying for a Personal Loan of Rs 20 Lakh

When you apply for a personal loan, the bank or NBFC will consider the following eligibility factors:

• Credit score: When you apply for a loan, lenders look at your credit score and your credit history. If your credit score from CIBIL or any other credit bureau is less than 750, your loan application would have lower chances of getting approved. On the contrary, applicants with credit scores of 750 and above have higher chances of getting personal loans at lower interest rates. Personal loan applicants with low or no credit scores can also avail Step Up Credit Card co-branded with SBM Bank India Ltd. as it will help them steadily build or improve their credit scores along with increasing their chances of availing personal loans.
• Income: As a personal loan of Rs 20 lakh comes at a high EMI obligation, lenders need to ensure that you have high income and adequate disposable amount to service the loan on time.
• Employment: When assessing your personal loan application, lenders also consider your job stability and the profile of your employer. Banks/ NBFCs prefer sanctioning personal loans to applicants working in public sector units, MNCs or reputed corporates as their higher income stability reduces the credit risk for the lenders. Your total work experience is also an important consideration for lenders. Lenders are more likely to reject personal loan applications of applicants who have just started their professional journey or have an unstable job history.
• Existing debt obligations: Lenders also look at your existing loan repayment obligations while evaluating your personal loan application. Most banks/NBFCs approve personal loan applications of those applicants whose total EMI/NMI ratio (including the EMI of the new loan) is within 50-55%. Hence, those having EMI/NMI of more than 55% may have lower chances of availing personal loan.

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Personal Loan Interest

Interest rate majorly influences the total interest cost of a personal loan. Therefore, those planning to avail personal loan of Rs 20 lakh must compare personal loan offers from as many banks/ NBFCs as possible and apply for the one that charges them the lowest personal loan interest rate as while suiting their tenure requirements as well as their repayment capacity.

Comparison of Interest Rates on Personal Loans Offered by Various Banks/NBFCs in India

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What is the EMI for Rs 20 lakh Personal Loan?

EMI for Personal Loan of Rs 20 lakh for Tenures of 1-5 years

To know EMI payable on a personal loan of Rs 20 lakh, use Paisabazaar’s personal loan EMI calculator. Simply enter the loan amount, interest rate and tenure to know your personal loan EMI instantly.

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Features of Personal Loan

• Interest Rate: Most banks/NBFCs offer personal loans at 10.49% p.a. onwards. Some Public Sector Unit (PSU) banks might offer the loans at lower interest rates.

• Tenure: The repayment period of Personal Loan usually up to 5 years, but for some lenders the tenure can also go up to 7 years
• Processing Fee: The processing fees of personal loans usually range up to 4%. However, during festive offers, some lenders also waiver the processing fee, subject to certain terms and conditions.
• Purpose: Personal loan is popular because it has no end-use restriction. Borrowers can use the loan amount to meet any financial requirements, except for speculative purposes.

Eligibility Criteria required for availing Personal Loan of Rs. 20 Lakh

• Nationality: Indian
• Age: 21 years (during loan application) and 67 years (at the time of loan maturity)
• Minimum Monthly Income: Rs 15,000
• The loan amount is offered to salaried individuals working with government, public sector undertakings and reputed private sector companies.
• Self-employed individuals availing personal loans usually need to have at least 1 year of business continuity.
• Applicants with credit scores of 750 and above usually have higher chances of availing personal loan.

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Documents Required for Personal Loan

• PAN card
• Proof of identity
• Proof of Signature
• Proof of Address

For Salaried

• Income Tax Return/Form 16
• Last 6 months’ bank statements
• Last 3 months’ salary slips

For Self-employed

• ITR for last 2 years along with Profit and Loss account, balance sheet and income computation for last 2 years
• Form 26 AS, Income Tax Challan or TDS certificate (Form 16A) for income tax declared
• Proof of Business

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