How Does Salary Affect Your Ability To Get A Personal Loan?
Do your work profile & salary status have a say in your personal loan approval? Find out how salary factors can affect your personal loan eligibility. Read Now!
A personal loan is a savior for salaried individuals because it can used for nearly any purpose, whether planned or sudden - travel, education, housing, etc. Undoubtedly, many people find this option to be helpful, especially when an unexpected expense arises. However, certain factors affect how much money you can borrow and the loan interest rate. The amount you are eligible to receive and the interest rate ultimately affect your salary and monthly finances.
How Much Of A Personal Loan Will I Be Approved On My Salary?
The approved personal loan amount depends on your income, credit history and other factors. If you have a good credit history, you can receive a higher loan amount than someone with a bad credit history. Similarly, if you have a higher income than someone else with the same debt-to-income ratio (DTI), they would likely get approved for a less amount than you would.
A personal loan doesn't need to be restricted to a specific purpose, unlike other types of loans like mortgages or auto loans. You can use it as an emergency fund or even an investment opportunity if you think the interest rate will make up for it later on down the line.
Most NBFCs in India allow personal loans up to Rs. 25 lakh. Most cases permit individuals to take personal loans up to 30 times their monthly income. Lenders often set the maximum EMI at about 45 - 60% of your monthly income to minimize risk. You can calculate this figure accurately using a personal loan eligibility calculator based on salary.
Salary is one of the critical factors that banks look at when determining whether or not to approve or deny loan applications. Lenders need to protect themselves from borrowers who may not be able to repay their loans, which may cause the lender financial loss or even bankruptcy if things get out of hand.
However, your salary is not the only factor that lenders consider before approving a loan application or an amount for you.
Factors Of Salary Consideration
• A high income means a greater borrowing capacity.
• A high income also refers to greater flexibility with the chosen loan tenure.
• A higher CIBIL score also increases the chances of getting lower interest rates on a personal loan.
Get A Personal Loan With IIFL Finance
No collateral or paperwork is required; you can check the amount of personal loan you can avail of on your salary by using a personal loan eligibility calculator based on salary and process it in just minutes by heading over to the IIFL website.
Submitting a loan application online is quicker and reduces the overall time taken to disburse a personal loan. If you have a credit score higher than 750, you could also benefit from a lower interest rate as well!
No matter your needs, get the right personal loan for all your requirements with IIFL Finance.
Q1. What documents do I need to submit for a personal loan?
• Past 3 months salary slips
• Last 6 months bank account statements
• KYC documents including PAN, Aadhar and/or driving license
Q2. Does my salary affect the amount of personal loan I can get?
Ans. Yes, a higher salary means a greater borrowing capacity and greater flexibility with the chosen loan tenure. A simultaneous higher CIBIL score also increases your chances of getting lower interest rates on a personal loan.
Q3. How is the amount of a personal loan usually calculated?
Ans. Most NBFCs in India allow personal loans up to Rs. 25 lakh. Most cases permit individuals to take personal loans up to 30 times their monthly income. Ideally, lenders set the maximum EMI at about 45 - 60% of your monthly income to minimize risks. You can calculate this figure more accurately using a personal loan eligibility calculator based on salary.