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!

16 Jul,2022 09:13 IST 140
How Does Salary Affect Your Ability To Get A Personal Loan?

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.

Zaroorat aapki. Personal Loan Humara
Apply Now

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.

FAQs

Q1. What documents do I need to submit for a personal loan?
Ans.
• 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.

Zaroorat aapki. Personal Loan Humara
Apply Now

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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