How Much Personal Loan Can You Get Based on Salary?

A personal loan is arguably one of the most useful financial products an individual with a salary could consider. Whether it is to take care of a sudden bill, emergency medical expenses, a home repair project, or for our own personal desires such as travel or further education, a personal loan gives people access to funds quickly, and has a potential repayment schedule flexible to the borrower. But the question that is bound to go through the minds of every salaried professional is: what amount of personal loan can I expect to receive based on my salary?

The answer is not the same for everybody. The loan amount factors include monthly take-home income, repayment capacity, credit score, and employment. Let’s go over how lenders assess your information and what can influence your qualification leverage.

Factors that determine personal loan eligibility

When applying for a personal loan online, lenders carefully evaluate the following criteria:

• Monthly Salary- Your salary is an indicator of your repayment capacity and is the biggest determining criteria for your loan eligibility. Usually, the more you earn, the more you are likely to qualify for.
• Age- Most salaried applicants between 21 to 60 years may apply.
• Credit Score- An applicant with a score of 750 or higher has a significantly better chance of getting approved with better interest rates.
• Length of Employment- Remaining with an employer in a consistent manner for one to two years shows stability and helps your eligibility.
• Existing Liabilities- If you already have other EMI loans, your chances of borrowing may me affected negatively due to existing liabilities.

How much loan can you get based on your salary?

The amount of your salary determines the loan amount that you can ultimately qualify for. Lenders will generally be willing to lend you anywhere from 10 to 20 times your net salary, depending on your total financial profile.

For example: If your salary is ₹25,000 a month, you will have a personal loan affidavit with a loan amount of approximately ₹2.5 lakh -₹5 lakh. If you earn ₹30,000, you will get an approval of about ₹3 lakh to ₹6 lakh. If your salary is ₹50,000 a month loan amount could be between ₹5 lakh to ₹10 lakh depending upon the lender. If your salary is ₹75,000 you could be approved a loan amount in the range of ₹7.5 lakh to ₹15 lakh. In the case of an individual with a ₹1 lakh salary, you could get a personal loan approved from ₹10 lakh to ₹20 lakh.

These are estimates because the amount you can borrow can change based on many things including your credit score, employer profile, any existing debts etc.

Other factors beyond salary

Although your income serves as the foundation for assessment, a lender’s approval decision additionally considers the following items:

• Credit score: Applicants that have a high credit score (typically in the range of 750 and 900) are assessed as low risk, so may be approved for a higher sanction amount and a lower interest rate. Possessing a lower credit score does not disqualify you from borrowing; however, this may decrease the sanction amount, and possibly increase the interest rate that would be accepted.
• Debt-to-income ratio (DTI): Lenders are aware of how much of a borrower’s income is already devoted to paying various loans. i.e., the bigger the portion of your salary that goes to repaying EMIs, the smaller the amount on which they will extend credit. In an ideal situation your total EMIs do not exceed 40% of your monthly income.
• Tenure of employment: A history of work stability means that you have been with the same employer for more than one to two years. Borrowers employed with an established, reputable company may get better terms on their loan since repayment risk is assessed as lower.

Key features of salary-based personal loans

For salaried professionals, personal loans come with unique advantages. Some of them include:

• Loan amounts of up to twenty times your monthly salary, depending on eligibility.
• Flexible repayment tenures ranging from 12 months to 60 months, so you can choose EMIs that suit your budget.
• Quick approvals that are faster through a personal loan online application process.
• Simple documentation, usually limited to salary slips, bank statements, and ID proofs.
• No need for collateral, since personal loans are unsecured.

How to enhance your loan eligibility

• If you are seeking to secure a higher amount on a personal loan, here are few easy steps you can take to improve your profile.
• 1. Limit EMI (Equated Monthly Installment) payments and credit card dues, and maintain a credit score of more than 750.
• 2. Whenever possible, pay off existing debts, so that your income is less burdened with EMIs.
• 3. Don’t change jobs too frequently, and maintain justifiable jobs to build history.
• 4. Try to limit loan applications simultaneously, as numerous enquiries can lessen your credit score.
• 5. Always do a calculated EMI affordability check ahead of time to make sure you will be able to easily repay.

Conclusion

Your income is the baseline for how much a lender will provide you for a loan; however, it is not the only factor a lender will look at. For salaried professionals, a lender will typically lend an amount equal to ten to twenty times the monthly income. The amount that is actually sanctioned however, will depend on several different factors such as the credit score, stability of employment, and outstanding liabilities.

By maintaining financial discipline, repaying debts on time, and making thoughtful decisions, you can improve eligibility and secure a higher loan amount that fits your needs. With Aeon Credit, applying for a personal loan online is simple, fast, and stress-free. Competitive interest rates, flexible EMI options, and quick approvals ensure you can achieve your goals or handle emergencies without financial strain.