First, find what's limiting you
A lender works out several limits and offers the lowest. Raising anything else makes no difference, so start by finding that limit. The eligibility calculator shows it under "What limits your loan". The usual culprits are:
- Repayment capacity: your income and existing EMIs. Try steps 1 to 5.
- A failed check: such as credit score, recent applications or work history. Try steps 6 and 7.
- Asset value or income multiple: the car or property value, turnover, or a multiple of salary. Try steps 8 and 9.
If repayment capacity is the limit
1. Close small loans
A small loan with a big EMI can take away a lot of borrowing power. On a ₹30,000 salary, for example, a ₹5,000 EMI reduces our personal loan estimate from about ₹6.97 lakh to ₹4.65 lakh. Before you prepay, check for any foreclosure charges.
2. Pay off credit card dues
Lenders commonly count 5% of your card balance as a monthly obligation, so ₹1 lakh of dues is treated like a ₹5,000 EMI. Clearing it can raise your eligibility and may help your score as well.
3. Choose a longer tenure
A longer term means a lower EMI, so the same income supports a bigger loan. In our business loan example, moving from 3 to 5 years raises the estimate from ₹21.39 lakh to ₹30 lakh. The trade-off is more interest overall, so if you can, prepay later when your finances allow.
4. Add an earning co-applicant
Where a lender accepts it, a spouse's or parent's income can be added to yours. Choose someone with a good credit record and few debts, since their record and obligations count too. They'll also be responsible for the loan.
5. Document all your income
Lenders can only count income they can verify. Rent and interest may count, often at about 50%, if they show in your ITR and bank statements. If you're self-employed, routing sales through your bank account and filing returns on time gives lenders a clearer picture.
If a failed check is holding you back
6. Repair your credit record
Pay on time, bring card usage down below about 30% of your limit, and dispute any errors on your report. A higher score can improve both approval and rate. On a ₹50,000 salary, for example, moving from the 650 to 699 band to 750 or above raises our personal loan estimate from ₹9.95 lakh to ₹11.63 lakh. Read the CIBIL score needed for each loan for more.
7. Pause applications and time your request
Each formal application adds a hard enquiry, so avoid applying everywhere at once. If you've made several recently, wait 3 to 6 months. Timing can help in other ways too. Waiting until you've completed 6 to 12 months in a new job, or until your business reaches 3 years, can move you into a stronger category.
If the asset or product cap is the limit
8. Change the loan structure
With a car loan, a higher down payment or a less expensive car may be the answer. If you own property, a secured loan generally allows higher amounts and longer terms than an unsecured one, though it puts that property at risk.
9. Start with a lender that knows you
Your salary-account or current-account bank can already see your income and repayment history, and may have pre-approved offers for you. Checking these is often a soft check. Banks also tend to give higher income multiples to government, PSU and MNC employees.
Things to avoid
- Paying someone to "guarantee" a loan. Be wary of anyone who asks for a fee upfront in exchange for promised approval.
- Changing income figures. Inflating income or altering documents can lead to rejection and serious consequences.
- Borrowing the maximum just because you can. Your limit is what a lender may allow, not necessarily what's comfortable for you.
- Using an unverified app. Before you share documents, check that the lender is regulated by the RBI and read its terms carefully.
A simple plan for the next 90 days
- This week: get your free credit report, check it for errors and run your numbers through the calculator.
- This month: pay down your card balances and close any small loans you can.
- Before you apply: stop other applications, collect your documents, and speak first to the bank that holds your main account.