How Much Personal Loan Can I Get on Salary?

Dec 7th 2023

Loan

Personal loans from banks and NBFCs typically have limits between Rs 10,000 and Rs 40 lakh. However, your ability to repay the loan will be the main factor determining the amount of personal loan you are qualified for. Your monthly disposable income is the main criterion used by banks and NBFCs to assess your ability to repay a loan. Other considerations include your monthly salary, your previous loan payback responsibilities, including the proposed loan, the income of any co-applicant, etc. When determining your eligibility for a certain loan amount, lenders may additionally take your income stability and EMI/NMI ratio into account.

How to Calculate The Loan Amount You Can Avail Against Your Salary?

There are several methods used by banks and lenders when it comes to determining the exact loan amount a person can get like Multiplier Method and EMI/NMI Ratio or a mix of these two. Let’s get to know them below.

Multiplier Method

When determining a borrower's eligibility for a personal loan, many lenders employ the multiplier technique. Using a predefined multiple of the applicant's net monthly income, lenders decide the amount of the personal loan using this technique. Depending on the lender and the applicant's monthly income, the multiple might be anywhere from 10 to 24 times that amount.

Salary	Expected Personal Loan Amount
Rs. 20,000	Rs. 5.40 lakhs
Rs. 30,000	Rs. 8.10 lakhs
Rs. 40,000	Rs. 10.80 lakhs
Rs. 50,000	Rs. 13.50 lakhs
Rs. 60,000	Rs. 16.30 lakhs

ENI/NMI Ratio

The percentage of your net monthly income (NMI) that is used to pay off both the new loan's EMI and your current debts is known as the EMI/NMI ratio. Lenders often favour approving personal loans for candidates with an EMI/NMI ratio between 50 and 55 percent.

Your EMI/NMI ratio is determined by your interest rate, duration, and net monthly income. You can either prolong your loan duration or take out a personal loan at a lower interest rate to enhance your eligibility for a greater personal loan amount, even if you cannot change your fixed monthly EMI responsibilities or your net monthly income (unless they can be paid off promptly).

Personal Loan Eligibility Criteria

The requirements for qualifying are different for self-employed and salaried workers. The following are the requirements for eligibility to apply for a personal loan:

corporation with a minimum turnover requirement.
The age range of the candidate must be between 21 and 60.
In Mumbai and Delhi, the minimum income required is Rs. 25,000; in other regions of India, it is Rs. 20,000.
A self-employed individual who has been in business for at least five years is eligible for a loan that is based on the industry's profit after taxes.
The candidate must have worked for the current firm for at least six months out of a minimum of one year.

More About Personal Loan Eligibility

You may use the personal loan eligibility calculator to get precise numbers. But take notice that the calculator is predicated on the fact that you already meet a number of other requirements for qualifying for a personal loan, including your credit score, work history, bank account history, and supporting paperwork. Your real eligibility is the result of several interrelated circumstances. Nevertheless, the personal loan eligibility calculator will assist you in obtaining a reasonable idea of what to anticipate before applying, provided that you meet these requirements.

I have just started a job. Can I get a personal loan?

It may be challenging to meet the "stable income" requirements of most lending organisations in order to be eligible for a personal loan if you have recently started a new job. Nonetheless, a new hire has three options for applying for a personal loan:

Co-borrower

You can apply for the personal loan as the primary applicant in this situation and bring along a cosigner who has a clean credit history, a steady salary, and a good CIBIL score. Your chances of receiving a personal loan for new hires increase when you have a co-applicant like that. Note that not all lenders provide shared personal loans, though. Consult the lender about your alternatives before to applying.

Reduced Loan Amount

If the amount of your personal loan is reasonable, the lender may authorise it regardless of your earnings. This is due to the fact that the prerequisite of being able to deduct EMI payments from your monthly income has been satisfied. This is dependent upon several factors, including as the lending institution's policies at the time of application.

Verify your credit score.

Usually, lenders will look up your credit score to see whether you have a track record of making on-time debt payments. It might be challenging to obtain authorised for a personal loan if your credit score is poor. Try to build a solid credit score if you don't have a lot of credit history by making sure you pay your bills on time and maintain a low credit utilization rate.

FAQs

How Is Qualifying for a Personal Loan Calculated?

Eligibility for a personal loan will be determined by a variety of criteria, including income, past credit history, current CIBIL score, income-to-debt ratio, and place of residence. Use online tools such as Investkraft's personal loan eligibility calculator to determine such eligibility with precision.

If I Make Less than ₹15,000 a Month, Can I Still Acquire a Personal Loan Without Opening a Bank Account?

Before approving a loan, the majority of lenders want a bank account. A bank account proves to lenders that you are able to repay the loan balance.

How Is The Debt to Income Ratio Calculated?

Essentially, the debt-to-income ratio is computed by dividing the total amount of your monthly loan payments by your gross monthly income. All of your current loan payments as well as credit card payments are included in your monthly debt repayments. Your monthly wage after all taxes deducted is your gross monthly income.

The Conclusion

Remember that based on the lender and your unique situation, personal loan terms and qualifying conditions may change. A personal loan is something you should consider carefully after doing a thorough comparison and study of your possibilities.