Need a 1 lakh rupees loan urgently? Check how you can get this loan

Small personal loans are in great demand in India. These loans can come handy in taking care of urgent needs, whether it is shopping for an expensive item, paying utility bills, or financial emergencies like paying fees for higher education and availing medical treatment.
 
The loan's unsecured nature and flexibility in choosing the repayment tenure make small loans a preferred choice of borrowers. However, if you have never applied for such loans before and wondering can I get a loan of 1 lakh, here is what you should know. 
 

How to get a Rs 1 lakh loan?

Multiple factors influence your personal loan approval chances. Below is a list of a few of them.
 

1. Income and employment history

   Your income and employment history helps the lender in assessing your repayment potential. However, the minimum income requirements change depending on the lender and the funds needed. For example, if you only need Rs. 1 lakh, your minimal income requirements will be substantially lower  from an amount Rs. 5 lakh loan.
    
   You will also need to demonstrate your consistency as an employee. Financial institutions usually expect borrowers to have a minimum of six months of employment with their current employer and an overall work experience of  one year.
    

2. Debt-to-income ratio

   This aspect is related to the previous factor. Debt-to-income (DTI) ratio demonstrates how much of your monthly income is utilised for paying existing debts. Financial institutions usually prefer a DTI less than or equal to fifty. 
    
   The rationale for this limit is that a lower DTI indicates you still have some money left in savings after meeting your current debt obligations. 
    
   As an illustration, suppose you require Rs 1 lakh with a 12-month repayment schedule. When availing this loan, your lender charges 12.5% interest on your profile with an EMI of Rs 8,908. In this case, the lender expects you to have a monthly income of at least Rs 17,000, provided you do not have any existing debt.
    

Also Read: 6 Proven Tips for Getting an Emergency Personal Loan Fast
 

1. Credit score

   Credit score and credit history play a vital role in loan approval. Various parameters are taken into consideration by credit bureaus to calculate your credit score. A few of these include credit utilisation ratio, debt portfolio, previous and existing debt repayment pattern, etc. The lender will approve a Rs 1 lakh loan right away if you have a strong credit history and no history of defaults. However, you should review your credit report once a year to look for discrepancies and plan a strategy to address any issues hurting your credit score.
    

2. Age

   Your age indicates your present and future earning potential. Most individuals often lose their earning potential after retirement and become dependent on their children or pension payments. Similarly, if you are too young and are in your college years, you might have no source of income and would be dependent on your parents for your basic needs. Given these presumptions, several financial institutions have established the minimum and maximum age limits of 21 and 58, respectively, for accepting personal loan applications.

How to calculate the EMI of a Rs 1 lakh loan?

 
You have two options for calculating your loan's EMI: manually using a mathematical calculator or an online personal loan EMI calculator. The following formula serves as the foundation for the EMI calculator.
 
EMI = P * R * (1+R)^N / [(1+R)^N-1]
 
Where
EMI is the equated monthly instalment amount,
P is the principal loan amount,
R is the rate of interest, and
N is the repayment tenure
 
To use the calculator, you only need to enter the three variables: loan amount, interest rate, and repayment tenure. If you are yet to apply for the loan and are unaware of the applicable interest rate, choose an interest rate that falls between the minimum and maximum rates indicated on the lender's website.
 

Steps to calculate Personal Loan EMI

 
The personal loan EMI calculator is an online tool available on almost all lenders’ and loan aggregators' websites. This free tool provides quick and accurate results with minimal inputs. 

If you are a first-time borrower or someone who has never used an EMI calculator before, below are the steps you must follow: 
 

• Step 1

   Select the loan amount.
   

• Step 2

  Choose the interest rate mentioned on your loan agreement
   

• Step 3

  Assess your budget and based on that, choose the optimum repayment tenure on the calculator. 
   

When you enter the above details, the calculator will display the loan EMI immediately. 
 

What is the EMI of a 1 lakh loan?

 
Personal loans are available for the maximum repayment term of five years. If you are wondering how to choose the most suitable payback tenure and what the EMIs will be for various tenures, the following table can guide you:
 

Parameters	Repayment Tenure
	One year	Two years	Three years	Four years	Five years
Loan Amount	Rs 1,00,000	Rs 1,00,000	Rs 1,00,000	Rs 1,00,000	Rs 1,00,000
Interest rate	12.5%	12.5%	12.5%	12.5%	12.5%
EMI	Rs 8,908	Rs 4,731	Rs 3,345	Rs 2,658	Rs 2,250
Interest payable	Rs 6,899	Rs 13,538	Rs 20,433	Rs 27,584	Rs 34,988
Total payable	Rs 1,06,899	Rs 1,13,538	Rs 1,20,433	Rs 1,27,584	Rs 1,34,988

 
The EMIs for loan products work on a simple concept: The more you stretch your repayment period, the more you must pay towards the interest component. However, it is also indisputable that longer terms lead to more affordable EMIs. Therefore, pay close attention to your budget before selecting the ideal tenure.
 
Also Read: Opting for Instant Personal Loan Know How to Get Better Interest Rate
 

To conclude 

 
Applying for a personal loan of Rs. 1 lakh is neither challenging nor requires any stringent qualifying requirements. You will be given an immediate loan approval if you just work on improving your credit history and make sure your age and income meet the lender's eligibility requirements. Before applying, make sure that you use an EMI calculator to determine the loan’s affordability.