Based on your income, how much personal loan can you get?

A personal loan is considered one of the easiest ways to avail funds in the times of need. With simple eligibility, easy documentation and instant processing, availing a personal loan has become easier than ever. However, your loan eligibility depends on a lot of factors, including your credit score, existing debt and your income. You can easily check your eligibility by using an online loan app.

Most lenders specify that you need a minimum salary of Rs. 15,000 to be eligible for a cash loan. However, the higher your income, the higher will be the loan amount that you will be eligible for.

Read on to know more about the loan amount eligibility.       

Who can get a personal loan?

Before you find out how much cash loan you are eligible for, it is very important to know if you are eligible for a personal loan in the first place. While the exact criteria differ from lender to lender, the basic set of criteria remains the same:

  • Applicant, whether salaried or self-employed, must be earning at least Rs. 15,000 per month.
  • Applicant must be at least 21 years of age.
  • Applicant must not be more than 58 years of age.
  • Applicant must a valid Indian PAN Card and Aadhaar Card.
  • Applicant should have a smart card driving license in case the Aadhaar card is not available.

Calculating your eligibility to get a personal loan

Lenders have two broad methodologies which they follow to find out how much loan an applicant will be eligible to get. These are the income multiplier method and the fixed obligation from income ratio.

  • Multiplier method: This method involves the derivation of loan eligibility by taking the monthly income of the applicant and multiplying the same with a specific time period. The exact time period with which the income will be multiplied will differ from lender to lender and on a case to case basis depending upon loan application. Commonly the multiple is half of loan duration. Take an example that a person is earning Rs. 30,000 per month and wants a cash loan of 2 years; the lender will take their income and multiple 30,000 with 12 months. This makes them eligible for loan of 3.6 lakhs.
  • Fixed obligation from income ratio: This is more of a month to month approach and considers the EMI amount to per month salary. Applicant’s loan eligibility will depend upon a set percentage of how much money they earn every month and the set percentage will be taken as total maximum EMI. Say a person earns Rs. 30,000 per month and have no other loan commitment. The lender will cut off 60% – 65% from this as the fixed obligations like food, housing etc. The rest of their per month earning the lender will take an EMI and thus derive the maximum loan amount. In this example, the borrower can get loan such that their EMI does not exceed Rs. 10,000 per month.

How to find out your own loan eligibility:

Finding your loan eligibility used to be a complicated task in the pre digital lending age; but with the advent of loan apps, knowing your loan eligibility has become much easier. The steps for finding your loan eligibility are now very simple:

  • First of all, you need to download a loan app which provides personal loans. While there a lot of loan app, you should choose one which has a reliable track record of stable and ethical lending and business practices.
  • Once you have chosen the app, you need to register and fill in all the basic details about yourself. This will include personal details like name, age, address etc. as well as employer and financial details like your employer, your salary as well as information about your account, and if needed the account statement as well.
  • Now you are ready to check your personal loan eligibility. The loan app will have an  option to go to a loan eligibility calculator. In this you will have options to provide data like the desired loan amount, your monthly earning, the duration for which you will need the loan.
  • Once you have put in data in all the mandatory fields, you will be presented with the figure of how much money you are eligible to borrow.


Nowadays, you can easily calculate your loan amount eligibility with a loan eligibility calculator available on the loan apps. In case, you want to increase the loan amount, you may try adjusting your loan tenure. A longer tenure reduces your EMI burden and this makes you eligible for a higher loan amount.

However, please bear in mind that this would also increase your total interest payout and keep you tied to a financial burden for a long time. Thus, before availing the loan you must make sure that you really need the amount you are applying for and that you have a proper repayment plan in place to clear your debt without defaults.

 You must compare and check different lenders to find the one offering you the best deal. In addition to this, don’t forget to mention all your income sources while applying for the loan, a higher income make you eligible for a higher loan amount. You might also consider adding a co-borrower to your loan application to get better benefits. Thus, there are many ways that can help you improve your loan amount eligibility.