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Personal Loan on Salary

Personal Loan on Salary Basis

Last Updated 27th Oct 2021

  • Your income is one of the basic eligibility criteria to avail of a personal loan.
  • The higher the income, the more the scope of availing funds.
  • Different banks have different income criteria. It would be best if you had a minimum salary of ₹ 20,000.
  • If you are self-employed professional, you must have gross annual receipt of ₹ 15 Lakh.
  • Banks determine the personal loan amount using the multiplier and FOIR method.
  • Get a personal loan on salary basis with a co-applicant if you have a low income.
Apply for Personal Loan @ 10.25%* Get upto ₹ 1,000* Cashback

How much Personal Loan Can I Get On My Salary?

A personal loan is an unsecured loan that does not require you to submit any collateral or security and is also one of the most accessible options to avail funds at the time of emergency. Thus, banks & NBFCs may charge a higher rate of interest on a personal loan.
To avail of a personal loan, you need to fulfil various eligibility criteria of banks and NBFCs. These include factors such as salary, debt-income ratio, current financial obligations, CIBIL score etc. At the same time, there is no standard or fixed income parameter that determines the amount of personal loan you can avail of against your income. However, having a good income is one of the primary factors that the banks may see to approve your loan.

What is the Minimum Salary for a Personal Loan?

Various banks & NBFCs have different salary eligibility for a personal loan. However, to get a personal loan, you should atleast have a minimum income of ₹ 20,000 if you are a salaried individual. The higher the income, the higher will be the chances to get more funds as a personal loan. The table below mentions the income eligibility requirement for top personal loan providers in the country.

Bank/AppMinimum IncomeLoan Amount
SBI
Compare
₹ 24,000 ₹ 50,000 - ₹ 15 Lakh
HDFC Bank
Compare
₹ 25,000 ₹ 50,000 - ₹ 75 Lakh
ICICI Bank
Compare
₹ 25,000 ₹ 50,000 - ₹ 30 Lakh
IDFC First Bank
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₹ 20,000 ₹ 1,00,000 - ₹ 40 Lakh
Axis Bank
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₹ 25,000 ₹ 50,000 - ₹ 25 Lakh
MoneyTap
Compare
₹ 20,000 ₹ 18,000 - ₹ 5 Lakh
Paysense
Compare
₹ 18,000 ₹ 5,000 - ₹ 5 Lakh
Early Salary
Compare
₹ 20,000 ₹ 8,000 - ₹ 5 Lakh

How Can I Check My Salary Eligibility for a Personal Loan?

  • You can check your salary eligibility for a personal loan using a personal loan eligibility calculator. It is an online tool that helps to get an estimate of loan amount based on multiple factors. These factors include monthly income, current debt to income obligations, age, loan amount, working experience etc.
  • Alternatively, you may also contact the bank or NFC to avail of a personal loan.
  • Along with the factors mentioned above, specific parameters such as your location, age, profession, the organisation you are working with may also affect the eligibility on a personal loan.
  • You can get an instant personal loan for salaried individuals if you have a good existing relationship with the bank.

Multiplier Method

Banks commonly use two methods to calculate the personal loan amount based on your salary. Under the multiplier method, the company's salary and reputation determine the multiplier of the individual. In addition, the multiplier may also vary from bank to bank. For instance, if you do not have any current obligations, your salary is Rs. 45,000, and the multiplier is 27. Therefore you can get a personal loan of upto 45000*27=12,15,000. The table below mentions the expected personal loan amount based on your monthly salary.

MultiplierPersonal Loan for 20,000 SalaryPersonal Loan for 30,000 SalaryPersonal Loan for 40,000 Salary
10₹ 2,00,000₹ 3,00,000₹ 4,00,000
15₹ 3,00,000₹ 4,50,000₹ 6,00,000
25₹ 5,00,000₹ 7,50,000₹ 10,00,000

Fixed Obligation Income Ratio

Another factor that impacts your eligibility for a personal loan is the ratio of fixed monthly outgo as a percentage to your income sources. To calculate FOIR, the monthly obligations listed include existing EMI on loan, credit card bills, rent payments & other recurring living expenses etc. Also, it is suggested that all the existing obligations should be less than 50%. Therefore, the lower the debt-income ratio, the higher amount you can get. The formula for Fixed Obligation Income Ratio is listed below:

FOIR = (Summation of Existing Obligations/Net Monthly Salary) * 100

Therefore, the maximum personal loan you can avail of will be subject to the remaining monthly disposable amount, i.e. (Income/FOIR)- Existing EMI & Obligations.
Consider you have an existing loan with EMI Rs. 5000. The following table provides the maximum EMI you can service.

BankFOIREMI Eligibility for Income Rs. 25,000EMI Eligibility for Income Rs. 50,000
Axis Bank 45% ₹ 6,250 ₹ 17,500
ICICI Bank 55% ₹ 8,750 ₹ 22,500
HDFC Bank 70% ₹ 12,500 ₹ 30,000
SBI 45% ₹ 6,250 ₹ 17,500
Tata Capital 65% ₹ 11,250 ₹ 27,500

How Much Interest Rate is Charged by Personal Loan Providers?

The interest rate on personal loans varies based on your credit history and other factors such as required loan amount, age, income etc. In addition, banks may also charge other fees such as a processing fee, prepayment & foreclosure charges etc.

Bank/AppInterest RatesProcessing FeeForeclosure Charges
SBI 9.60% 1.00% Allowed After 6 months & Charges at 3%
HDFC Bank 10.25% Upto 2.50% Min ₹ 999 Allowed After 12 months & Charges at 2 - 4%
ICICI Bank 10.25% Upto 2.25% of Loan Amount Allowed After 6 months & Charges at 5%
IDFC First Bank 10.49% Upto 2.00% Allowed After 12 months & Charges at 5% foreclosure charges. Can foreclose after 3 months in case of smart personal loan
Axis Bank 10.49% Rs.4,999 Allowed After 1 months & Charges at For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2%
MoneyTap 13.00% 2% + GST Allowed After 3 months & Charges at 3%-5% foreclosure charges
Paysense 15.96% Rs. 500 + GST Allowed After 3 months & Charges at 4%
Early Salary 24.00% Rs. 399, 50% off on Processing fees Max 300 off, Validity till 31st October 2021 Allowed After 0 months & Charges at Nil Foreclosure Charges

What Documents are Required ?

You will require to submit the documents for income proof and other KYC documents to avail of a personal loan:

  • Identity Proof: Passport; PAN Card; Aadhaar card; Voter ID; Driving license.
  • Address Proof: Passport; Driving License, Voter ID card, Utility bills.
  • Income Proof; Latest 3 months’ salary slip as well as six months’ bank account statement.
  • Age proof: PAN card; Passport; Driving License; Voter ID; Birth certificate, School/ college leaving certificate

How to Apply for a Personal Loan?

If you have a low income, you can avail of a personal loan with a co-applicant. Below-mentioned is different ways to apply for a personal loan:

  • Online:- At the bank’s website or through MyLoanCare. Click to Apply for Personal Loan
  • Offline:- By visiting the nearest bank branch

FAQs

How much loan can I get if my salary is ₹ 25000?

The eligibility for a personal loan is based on various factors, including your current obligations, monthly salary, etc. Assuming you do not have existing current obligations, you can thus get a personal loan for up to 27 times the monthly salary, i.e. 25000*27=₹ 6,75,000.

How much personal loan can I get on 40000 salaries in SBI?

The eligibility for personal loan amount depends on FOIR and multiplier. If you have a salary of Rs. 40,000, and the FOIR in SBI is 0.45, you can get a personal loan of upto ₹ 18,000. However, the multiplier is 15, then the loan amount will be ₹ 6,00,000

How much loan can I get on a 40000 salary in HDFC?

The personal loan amount depends on the lowest of two factors; FOIR and multiplier. If you have a salary of Rs. 40,000 and the FOIR in HDFC are 0.70, you can get a personal loan of upto ₹ 28,000. However, if the multiplier is 27, the loan amount will be ₹ 10.80 Lakh. Bank considers both ways of calculating the eligibility and offers the loan amount, whichever is lower.

How much loan can I get if my salary is 35000?

As mentioned above, FOIR and multiplier determine the amount of loan you can get. If you have a salary of Rs. 35,000, you can get a maximum personal loan of upto ₹ 17,50,000.

What is the personal loan eligibility for salaried employees?

To avail of a personal loan, the salaried employees need to fulfil the following eligibility criteria: i)Age : 18 years to 65 years. ii)Minimum Income : Rs. 20,000 iii)FOIR : 0.45% iv)Work Experience : 0 v)Cibil Score : 650 and Above

Will my income affect my personal loan eligibility?

Your income is one of the crucial factors that affect your eligibility for a personal loan. If you have a high income, you have more chances to get a personal loan at a low-interest rate.

How can I get a personal loan with a low salary?

A lot of banks and NBFCs offer a low-salary personal loan. However, you can always add a co-applicant to improve your eligibility for a personal loan.

Which bank gives personal loans without a salary slip?

Few banks may give you a personal loan without salary slips. However, you may need to submit other income documents like ITR, bank statements.


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