Although banks’ loan sanctioning criteria differs from one bank to another, a few factors that determine the loan amount remain the same.

A few of these criteria are:

- Your credit score

- Your current income level

- Your current liabilities (in terms of other loans)

Credit score

Credit score is a score, between 300 and 900, that is assigned to you based on your payments towards your credit cards or loans. It is a way to identify your credit worthiness and helps banks or NBFCs decide whether they should lend to you or not. Although it is subjective, but a score above 800 is considered to be good or safe to lend to. A higher credit score (closer to 900) shows that you have serviced your previous loans and/or credit card dues in a proper, timely manner, which would lead lenders to feel that you are a “safe” borrower, thereby leading to the sanction of a higher loan amount.

Current income and liabilities

Your current income level and your liabilities, such as your outstanding credit card dues, unpaid loans, current EMIs, etc. have a direct bearing on your repayment capacity. Hence, if you are in a lower income bracket or have a large amount of unpaid credit card bills or outstanding loan EMI, you would be sanctioned for a lower personal loan amount compared with an individual with a higher income or fewer financial liabilities.