Lender provides personal loans starting range of Rs. 50,000 to Rs. 40 lakh. However, banks will calculate various factors like monthly income, expenses, and other eligibility criteria. Generally, a personal loan is an unsecured loan. Bank offering the loan without taking security from the borrower.
Borrower salary is an important factor when taking a personal loan. 24hr Loan explains how to calculate personal loans based on your salary.
Techniques for Calculating the Personal Loan Amount
To determine personal loan eligibility, Banks/NBFC companies use different methods like debt-to-income ratio, multiplier method, and net monthly income ratio (NMI). These methods are discussed below:
Debt-to-Income Ratio (DTI)
Lenders use DTI (Debt-to-Income) calculation to check your repayment ability. DTI calculations show your financial health. The lender understands the borrower’s monthly debt and other expenses from net monthly salary.
Multiplied Method
Lenders use other techniques to determine personal loan eligibility that as the multiplier method. The borrower’s net income is multiplied by 10 to 28 times to receive the maximum loan amount. Let’s example you are getting Rs. 20,000 in–hand salary. So, a multiple of 25 (20,000 X 25) is Rs. 5 lakh. If you don’t have any running loans, you may obtain a Rs. 5 lakh loan.
This calculation depends on the lender. Financial institutes use their own calculated multiplier method to check borrower loan eligibility.
Loan Amount Based on Multiplier Method
| Monthly Net Salary | Loan Amount |
| Rs. 12,000 Salary | Rs. 1.20 Lakh |
| Rs. 13,000 Salary | Rs. 1.30 Lakh |
| Rs. 14,000 Salary | Rs. 1.40 Lakh |
| Rs. 15,000 Salary | Rs. 1.50 Lakh |
| Rs. 16,000 Salary | Rs. 1.60 Lakh |
| Rs. 17,000 Salary | Rs. 1.70 Lakh |
| Rs. 20,000 Salary | Rs. 2.00 Lakh |
| Rs. 25,000 Salary | Rs. 2.50 Lakh |
| Rs. 27,000 Salary | Rs. 2.70 Lakh |
| Rs. 30,000 Salary | Rs. 3.00 Lakh |
Also Read: Personal Loan Disbursement Process
Monthly Income Ratio
The financial company will determine net monthly income which is lower from gross salary. If the borrower’s gross salary is Rs. 20,000, net income will lower after deduction which may be Rs. 17,200. So, the lender will calculate on net salary that is Rs. 17,200.
Higher-income earners must be eligible for the maximum loan amount. But the DTI ratio is also an important factor.
Eligibility Criteria for Salaried Person
Obtaining a personal loan from 24hr Loan is affordable. Meet the eligibility details to get a loan for a salaried person:
- Indian Residence
- Monthly Net Salary: Rs. 12,000 or above
- Total job experience must be 12 months
- Applicant Age under 21 to 55 years
- Maintain Credit Score: -1 or 700+
Required Documents to Obtain Personal Loan
Salaried persons obtain personal loans with hassle-free documents. Submit all the following documents listed at loan process time:
- Aadhaar Card
- Pan Card
- Latest month’s salary slip
- 12 months bank statement
- Residential documents: Gas bill / Utility bill
- Other documents if need
Compare Interest Rate of Banks / NBFCs
| Lenders | Rate of Interest (p.a.) | Monthly Income | |
| WeRize | 1.35% per month | Rs. 12,000 | Apply Now |
| MoneyView | 1.33% per month | Rs. 13,500 | Apply Now |
| InCred | 11.49% to 18% p.a. | Rs. 15,000 | Apply Now |
| Fibe | 24% to 30% p.a. | Rs. 15,000 | Apply Now |
| Finnable | 16% to 22% p.a. | Rs. 15,000 | Apply Now |
| SBI Xpress Credit | 11.50% to 14.50% p.a. | Rs. 15,000 | Apply Now |
| IDFC | 12.50% to 18% p.a. | Rs. 15,000 | Apply Now |
| PaySense | 1.4% to 2.3% per month | Rs. 18,000 | Apply Now |
| Upward | 9% to 32% p.a. | Rs. 18,000 | Apply Now |
| Faircent | 12% to 28% p.a. | Rs. 25,000 | Apply Now |
| Credit Saison | 14% to 24% p.a. | Rs. 25,000 | Apply Now |