® 
The amount of personal loan you can secure is often contingent on your monthly salary, and lenders employ different methods to calculate this eligibility. Read on to learn the methods lenders use to determine your personal loan amount eligibility based on your salary and also provide a comparison of personal loan interest rates offered by top banks and NBFCs.
Methods to calculate personal loan amount
Lenders typically rely on two primary methods, the Multiplier Method and EMI/NMI Ratio Method, or sometimes a combination of both, to ascertain your personal loan eligibility based on your salary.
Multiplier Method
This method involves lenders calculating your personal loan amount as a multiple of your net monthly income (NMI). The specific multiple varies from lender to lender but generally falls within the range of 10 to 24 times your monthly income. Let's take the example of State Bank of India (SBI), which offers personal loans of up to Rs 20 lakhs or 24 times NMI. If your monthly salary is Rs. 40,000, utilizing the multiplier method, you could potentially secure a personal loan of up to Rs. 9.6 lakhs.
Here's a tabulated representation of the maximum loan amount you could qualify for with varying monthly salaries using the Multiplier Method:
|
Monthly Salary |
Maximum Loan Amount |
|
Rs. 15,000 |
Rs. 2.25 Lakh |
|
Rs. 20,000 |
Rs. 3.00 Lakh |
|
Rs. 25,000 |
Rs. 3.75 Lakh |
|
Rs. 30,000 |
Rs. 4.50 Lakh |
|
Rs. 35,000 |
Rs. 5.25 Lakh |
|
Rs. 40,000 |
Rs. 6.00 Lakh |
|
Rs. 45,000 |
Rs. 6.75 Lakh |
|
Rs. 50,000 |
Rs. 7.50 Lakh |
|
Rs. 60,000 |
Rs. 9.00 Lakh |
|
Rs. 70,000 |
Rs. 10.50 Lakh |
|
Rs. 80,000 |
Rs. 12.00 Lakh |
|
Rs. 90,000 |
Rs. 13.50 Lakh |
|
Rs. 1,00,000 |
Rs. 15.00 Lakh |
Note: This calculation assumes zero existing loan repayment obligations. For the multiplier method, the maximum loan amount is often set at 15 times the NMI.
EMI/NMI Ratio:
The EMI/NMI ratio measures the proportion of your net monthly income (NMI) allocated to servicing existing EMIs and the anticipated EMI of the new loan. Lenders usually favour applicants with an EMI/NMI ratio of up to 50-55%. This ratio is influenced by factors such as your net monthly income, loan tenure, and the interest rate. While you may not be able to modify your income or fixed EMIs, extending your loan tenure or securing a personal loan at a lower interest rate can boost your eligibility for a larger personal loan amount.
Comparison of Personal Loan Interest Rates
Here's a comparison of personal loan interest rates offered by top banks and NBFCs:
|
Banks/NBFCs |
Interest Rates (p.a.) |
|
Axis Bank |
10.49% onwards |
|
IndusInd Bank |
10.49% onwards |
|
IDFC First Bank |
10.49% onwards |
|
HDFC Bank |
10.50% onwards |
|
ICICI Bank |
10.50% onwards |
|
Kotak Mahindra Bank |
10.99% onwards |
|
Tata Capital |
10.99% onwards |
|
Bajaj Finserv |
11.00% onwards |
|
Federal Bank |
11.49% onwards |
|
DMI Finance |
12.00% - 40.00% |
|
L&T Finance |
12.00% onwards |
|
Kreditbee |
12.25% - 30.00% |
|
MoneyTap |
12.96% onwards |
|
Piramal Finance |
12.99% onwards |
|
Aditya Birla |
13.00% onwards |
|
MoneyView |
15.96% onwards |
|
Cashe |
27.00% onwards |
