A 10 lakh personal loan may be an excellent option when you have large sums of money to be spent on major life expenses such as weddings, education, renovation of your home, or paying off existing debts. Personal loans are not collateralized loans, i.e., there is no collateral requirement, so they are a preferred option for the majority. In this article, we will guide you through all there is to know about 10 lakh personal loans including EMI calculation, eligibility, and interest rates.
What is a 10 Lakh Personal Loan?
A 10 lakh personal loan is a product through which you may borrow up to 10 lakhs from a bank or financial institution without presenting any security. The loans provide lenient repayment period and may be availed to finance multifarious personal spends between meeting medical expenses, further studies or even to start a new business.
Types of Personal Loans
Personal loans usually are of two kinds:
Secured Personal Loans – They are secured with collateral, e.g., property or a car.
Unsecured Personal Loans – A 10 lakh personal loan is generally unsecured, i.e., there is no collateral.
10 Lakh Personal Loan EMI – How Does It Work?
When you take a 10 lakh personal loan, you undertake to pay the loan in the form of monthly installments (EMIs). The EMI you pay is based on the loan period and the interest rate charged by the lender.
10 Lakh Personal Loan EMI for 5 Years
If you borrow a 10 lakh personal loan EMI for 5-years tenure, your monthly EMI will depend on the interest rate. Here’s an example:
Loan Amount: ₹10,00,000
Tenure: 5 years (60 months)
Interest Rate: 12% per annum (assuming)
With these parameters, your EMI would be around ₹22,800 per month.
The amount of EMI will vary based on the interest rate and tenure. For a low interest rate, your EMI will decrease, and if you have a high interest rate, your EMI will increase.
10 Lakh Personal Loan Eligibility – Who Can Apply?
Before you go for a 10 lakh personal loan application, find out about the eligibility conditions of lenders. While this might differ slightly from lender to lender, some common criteria are:
Age Criteria
The applicant must generally be between 21 years to 60 years of age.
Income
You should have a regular monthly income. Typically, lenders expect a minimum monthly income of ₹25,000 (for salaried candidates) or ₹30,000 (for self-employed candidates).
Credit Score
A good credit rating (over 750) is required to boost your chances of approval. The higher the score, the better it is, as it indicates your capacity to repay loans in time.
Employment Status
You must be working with a well-known company or possess a stable business for a couple of years if you are self-employed.
Other Factors
The lenders might also consider your current debt liabilities and other financial commitments before sanctioning the loan.
10 Lakh Personal Loan Interest Rate – What to Expect
The interest rate for a 10 lakh personal loan is one factor that will have a significant influence on your EMI per month and the overall amount you repay. Interest rates can differ based on various factors such as your credit score, lender’s policy, and your monthly income.
Average Interest Rates
Banks: 10% to 20% p.a.
NBFCs (Non-Banking Financial Companies): 12% to 24% p.a.
How to Avail a Low Interest Rate?
In order to obtain the lowest interest rate on a 10 lakh personal loan, ensure that:
Your credit history is good (750+).
You possess a steady and high salary.
You have a positive rapport with the lender.
It is also better to shop around and compare loan quotes from various banks and financial institutions to secure the best interest rate.
Personal Loan Upto 10 Lakh – Can You Borrow More?
If you require more than ₹10 lakh, there are some lenders and banks which provide personal loans for up to ₹25 lakh or even more, but these loans typically demand a good credit score, better income, and security. For those with greater requirements, you can also go for loan combos or other financing like home equity loans or business loans.
Advantages of Taking a 10 Lakh Personal Loan
No Collateral Needed: The personal loan of up to 10 lakh is unsecured, and you don’t have to mortgage any asset.
Flexible End Uses: You can utilize the loan amount for multiple ends, like education, medical bills, renovation of home, or a vacation.
Fixed Repayment Tenure: You can budget better with a fixed EMI during the loan period.
Drawbacks of Availing a 10 Lakh Personal Loan
High Interest Rates: Since personal loans are not secured, the interest rates can be higher than other loans.
Eligibility Requirements: You must satisfy stringent eligibility conditions, such as a good credit history, stable income, and low current debt levels.
EMI Commitment: It is important to make sure that you can easily afford the monthly EMI during the loan period.
Conclusion
A 10 lakh personal loan is a strong financial instrument that can assist you in fulfilling big expenses without collateral. But it is important to thoroughly evaluate your eligibility, compare interest rates, and determine a 10 lakh personal loan EMI before applying. By knowing the loan structure, repayment period, and interest rates, you can make a well-informed decision that best meets your financial objectives.
