How to get a loan of ₹40,000 in India?

economictimes.indiatimes.com:

Understanding loan eligibility

Before diving into specific loan options, understanding the general principles of loan eligibility is crucial. Lenders assess your financial profile based on several key factors:

• Credit rating: Credit rating acts as a financial report card, reflecting your past borrowing and repayment behaviour. A high credit score of around 700 indicates responsible credit management and significantly improves your chances of loan approval and securing favourable interest rates.
• Income and employment: Having a stable income from a salaried position or a well-established business strengthens your loan application. Lenders evaluate your capacity to repay the loan by looking at your income.
• Debt-to-income ratio (DTI): This ratio compares your monthly debt payments (such as existing loans and credit card bills) to your gross monthly income. A lower DTI suggests that you have more of your income available to repay loans, which makes you more appealing to lenders.
• Loan purpose: Specifying a clear and legitimate purpose for the loan can improve your chances of approval. Some lenders might offer targeted loan products with specific eligibility criteria based on the loan purpose.
• Collateral (if applicable): Securing your loan with collateral, such as fixed deposits, property, or valuable assets, can be beneficial, especially for borrowers with lower credit scores. Collateral provides additional security for the lender in case of loan default.
  

Available loan options

While traditional banks are the first thought that comes to mind for loans, several other avenues can fulfil a ₹40,000 loan requirement in India. Here's an overview of the most common options: