Maximum Personal Loan Amount You Can Get on Your Salary

oYour salary plays a significant role in determining the maximum personal loan amount you’re approved for. Lenders prefer giving loans to those people who have a high and stable income.

An increased income will automatically increase your loan eligibility because of which you can get approved for a higher loan amount at lower interest rates.

Want to know the maximum loan you can get on your salary? Keep reading to find out.

Maximum Personal Loan Amount Limit in India

While your monthly income and credit score play a significant role in determining the maximum amount of a personal loan, it also depends on the capacity of your lender. In India, a personal loan’s up to ₹50 lakhs with maximum limit.

After you have completed your loan application, the lender will assess your credit profile to evaluate your eligibility. Based on this you will be approved for a loan.

Methods to Calculate Personal Loan Amount

There are two ways in which lenders calculate your offered personal loan amount – Multiplier method and EMI/NMI ratio.

1. Multiplier Method:

Most lenders use the multiplier method to evaluate a borrower’s maximum amount for a personal loan. In this, the lender multiplies a pre-determined number (the multiplier) with the monthly salary of the borrower.

Usually, this multiplier can range from 2 to 24, depending on the lender. For example, if your monthly salary is ₹15,000 and the multiplier that the lender uses is 3, then the maximum personal loan amount you can get is ₹45,000.

2. EMI/NMI Ratio:

EMI/NMI ratio is another method to calculate the highest amount on personal loan. It’s the proportion of your Net Monthly Income (NMI) spent on repaying your monthly EMIs (this includes both – your old and new loans). Lenders prefer giving loans to those customers whose EMI/NMI ratio is 50-55%.

Also Read: Personal Loan EMI Calculator

Expected Eligible Loan Amount for Different Salaries

To understand the multiplier method better, this will be a borrower’s expected eligible loan amount for different salaries if the lender’s multiplier is 10.

*Please note all the above numbers are for representation only and the maximum personal loan amount you’re eligible for can vary from lender to lender.

How is the Interest Rate on Personal Loans Determined?

When you take a personal loan, you have to pay it back with interest.

The interest rate offered on your personal loan depends on many factors like your monthly income, repayment history, and credit score.

If you have a strong credit profile and high monthly income, then you can get lower interest rates on your loans.

The interest rate on your personal loan amount can be calculated using 2 methods:

1. Flat Rate Method

In this, the interest rate is applied to the total principal amount. The interest rate you have to pay every month remains the same throughout the personal loan repayment tenure.

2. Reducing Balance Method

In the reducing balance method, the interest charged decreases as you repay your EMI. It’s because the interest rate is applied only to the remaining outstanding amount after each EMI payment.

Different Payment Methods for a Personal Loan

It’s important to make on-time loan payments to avoid any penalties and late fees. Here are the different payment methods you can use to pay your loans on time.

Eligibility Criteria for Personal Loans for Salaried Individuals

You have to meet your lender’s eligibility criteria to complete your loan application. While the eligibility criteria for different lenders can vary, there are some common factors that make you eligible for a personal loan.

– Age: You need to be between 18 to 65 years old to be eligible for a loan.

– Documents: Most lenders require identity proof (like your PAN, Aadhaar), income proof (bank statement, salary slips) and KYC documents.

– Employment & Monthly Income: You should have a minimum monthly income of at least ₹15000.

– Credit History & Score: A high credit score, clean repayment history and strong credit profile will get you high loan amounts at lower interest rates.

But before you apply for a loan it’s important to check whether the loan providers offers loans to salaried individuals.

Zype’s eligibility criteria is simple! This is all you need to get a personal loan up to ₹5 lakhs.

1. You should be 21 years or above. 

2. You should be an Indian with a valid PAN & Aadhaar card. 

3. You should be a salaried individual with a minimum monthly salary of at least ₹15000.

Must Read: How to Get a 50000 Loan on an Aadhar Card?

Documents Required for a Personal Loan

The list of documents you need for a personal loan depends on the loan providers requirements. But some required documents that most loan providers ask for are PAN card, Aadhaar card, bank statement, salary slips, address proof, etc.

Want a personal loan without any document uploads or paperwork? This is all you need to complete your application on Zype:

1) Mandatory Documents:

You will need your PAN and Aadhaar number to fill out your application and complete your KYC. (Physical copies not required)

2) Proof of Photo Identity:

Complete a selfie-based verification after you’re approved for a loan from Zype to unlock your credit limit.

3) Proof of Income (optional):

You can apply for a higher loan limit on Zype by uploading your bank statement of the last 4 months.

Conclusion

The maximum amount for a personal loan depends on various factors like your monthly income, repayment history and capacity of your lender.

On Zype, you can get personal loans up to ₹5 lakhs starting at just 1.5% interest. Want to find out your personal loan’s highest amount on Zype? Just download the app from the AppStore/PlayStore and complete the application now!oan providers