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Personal Loan Eligibility Factors
Some Main factors that plays important role for personal loan eligibility, personal loan interest rates is also depend on applicant’s eligibility.
|Eligible Borrowers||Salaried persons working in private or government sector and self employed professionals like Doctors, CA etc|
|Age Criteria||21 years to 60 years|
|Income Required||15,000 – 20,000 per month depend on area; Rs. 5 Lakh gross annual receipts for professionals|
|Work Experience Required||3 years and above|
|Current Company Experience||1 year|
|Minimum CIBIL Score||700|
|Income and EMI Ratio||up to 65%|
Personal Loan Eligibility Calculator
Basically loan eligibility depend on applicant’s company profile, designation, monthly income or annual income as per ITR, stability in job or stability in business, credit record. There are two methods to calculate eligibility criteria – Multiplier Method & FOIR (Fixed Obligation Income Ratio).
Multiplier Method – In this method, banks calculates eligibility a multiplier to your net take home income, bank apply a multiplier of 10 to 20 and these multiplier depend on net monthly income and company profile (i.e in which category company comes as per bank)
For Example: Applicant’s monthly net salary of Rs 30,000 and works with category B company as per the bank. If the bank applies the multiplier of 16 to calculate personal loan eligibility, so as per calculation the eligible loan amount will be “30,000 * 16” i.e Rs. 4,80,000.
If the applicant’s net take home salary is Rs. 30,000 and pays emi of Rs. 5000/- per month then he/she is eligible to get [net monthly salary i.e 30000 – monthly emi i.e 5000 = 25000] (25,000 * 16 = 400000), so the applicant is eligible for Rs. 4 lakh of loan amount.
FOIR (Fixed Obligation Income Ratio) – Personal loan eligibility is calculated on the basis of monthly installments that applicant can service with respect to net income after accounting for other fixed expenses like rent, home loan or consumer durable emi, credit card outstanding etc. Generally Banks and NBFCs allows 50 – 65% of your net take home income as EMI. So loan amount may vary as per obligations.
For Example: If applicant’s net salary is Rs. 40,000 and Personal loan is required by him, no other fixed obligations or EMIs to pay. The bank has a maximum FOIR requirement of 50% and hence, maximum EMI is allowed to Rs.20,000, which at the lowest rate of interest 10.75% and longest tenure of 5 years, translates in to a loan amount of Rs. 9.25 Lakh.
In the same example, if applicant has another bike loan and pays Rs. 2000 as an emi, then in this case he/she will be eligible to avail a personal loan with upto emi of Rs. 18,000/month, then the applicant is eligible to get loan upto Rs. 8.30 lac.
Personal Loan FAQs – Frequently Asked Questions
It is an unsecured (do not put any type of security) loan provided by a bank and non-banking financial company (NBFC) based on – income, previous credit record, repayment capacity, employment type and more. Personal loan is available for salaried and self-employed.
What is personal loan?
How to apply for personal loan?
What is Personal Loan EMI Calculator?
What are eligibility criteria for Personal Loan?
- One must have a regular source of income.
- Salaried individual, self-employed business person or a professional both are eligible.
- One must have proper credit record and good CIBIL.
- Final amount sanctioned will depend on your income and eligibility and some other factors as per the lender’s criteria.