How lenders decide your personal loan amount
A personal loan has no security behind it, so the lender relies entirely on your income and your record of repaying. In practice, that comes down to three limits. Whichever is lowest becomes your likely loan amount.
- Repayment capacity. Lenders allow a set share of your income for all EMIs, called FOIR. Subtract the EMIs you already pay, and what remains is the largest new EMI you can take. The calculator converts that EMI into a loan amount using your rate and tenure.
- Income multiple. Many lenders also cap the loan at a multiple of your monthly income. This calculator uses 30 times for government, PSU, MNC and listed company employees, 24 times for large private companies, and 18 times for small firms and the self-employed.
- Product ceiling. This calculator uses an overall personal loan ceiling of ₹40 lakh.
What your salary could get you
These estimates assume a 30-year-old with a CIBIL score of 750 or above, working for a large private company in a metro city, with no existing EMIs, borrowing for 5 years at the calculator's indicative 10.5% rate.
| Monthly in-hand salary | Likely loan | EMI | Limit set by |
|---|---|---|---|
| ₹25,000 | ₹4.65 lakh | ₹9,995 | 40% FOIR |
| ₹30,000 | ₹6.97 lakh | ₹14,981 | 50% FOIR |
| ₹40,000 | ₹9.30 lakh | ₹19,989 | 50% FOIR |
| ₹50,000 | ₹11.63 lakh | ₹24,997 | 50% FOIR |
| ₹75,000 | ₹18 lakh | ₹38,689 | 24× salary |
| ₹1,00,000 | ₹24 lakh | ₹51,585 | 24× salary |
Existing commitments make a big difference. On a ₹50,000 salary, an existing ₹10,000 EMI and ₹40,000 of credit card dues reduce the estimate from ₹11.63 lakh to ₹6.04 lakh.
Basic eligibility checks
Even a strong income cannot make up for failing one of these checks. The calculator marks each one as OK, Watch or Fail.
- Age: at least 21, with the loan ending by 60 if you are salaried or 65 if you are self-employed.
- Minimum salary: ₹25,000 a month in metro cities, ₹20,000 in Tier 1 cities and ₹15,000 in Tier 2 and 3 towns.
- Work history: at least 1 year in total. Under 6 months with your current employer may need extra review.
- CIBIL score: below 650 usually means rejection for this type of loan.
- Recent applications: 3 or fewer in 6 months is preferred. Seven or more is likely to count against you.
- Repayment history: a default, settlement or write-off in the last 2 years leads most lenders to reject.
Self-employed applicants are assessed on ITR income instead of salary. They generally need at least ₹2.5 lakh a year in profit plus depreciation, 3 years in business and 2 years of filed returns.
How your CIBIL score changes the amount
Your score affects more than approval. A lower score usually means a higher rate, and at a higher rate the same EMI repays a smaller loan. With a ₹50,000 salary and all else equal, the calculator estimates ₹11.63 lakh at 750 or above (10.5%), ₹11.23 lakh at 725 to 749 (12%), and ₹9.95 lakh at 650 to 699 (17.5%). These rates are indicative figures used for the estimate, not quotes from any lender.
How to get a higher amount
- Pay off card dues and small loans first. Lenders treat 5% of your card balance as a monthly obligation, so clearing it directly frees up repayment capacity.
- Choose a longer tenure. A longer term lowers the EMI, so the same income supports a larger loan, though you pay more interest overall.
- Start with your salary-account bank. It can already see your income and may have a pre-approved offer for you.
- Avoid applying to many lenders at once. Each application adds a hard enquiry, and a cluster of them can count against you.
Read the full guide on how to increase your loan eligibility, or check your ratio with the FOIR calculator.