FY 2018 witnessed an upswing in the procurement of unsecured loans, especially personal loans, from 2017. Over the last few years, personal loans have been among the most rapidly growing financial product year-on-year.
Lower interest rates, faster disbursal processes, and an unsecured nature are one of the most vital reasons behind the rapid growth of these loans. So, if you’re considering how much loan can I get on my salary, you need to know a few things and set your priorities accordingly.
How does personal loan work?
Unsecured loans like personal loans are a kind of term loan. It means you borrow a fixed sum of money, which you repay with interest in the form of EMIs over a fixed tenor.
There is no fixed minimum salary for a personal loan. This eligibility criteria varies form one lender to another. The loan amount you qualify for depends on your creditworthiness. When you apply for an unsecured loan, your lender will review your credit history to check whether you’re able to repay them the money you owe.
How much can you borrow?
According to financial experts, the loan amount can amount from a few thousand to lakhs depending on the lender and the borrower’s credibility. It mostly depends on the lending institution. You can apply for a personal loan from leading NBFCs like Bajaj Finserv of up to Rs.25 lakh. By availing this collateral-free loan, you enjoy competitive interest rates, minimal documentation, instant approval, fast disbursal, and flexible tenors.
Bajaj Finserv also brings you pre-approved offers on unsecured loans like personal loans, business loans and secured credits like home loans among other numerous financial products and services.
How much loan can you get approved for?
Many lenders provide loan payment calculator as a self-help tool to calculate the cost of a personal loan. The lowest APRs (Annual Percentage Rates) are awarded to applicants with above-average credit scores. Applicants with lower credit scores will have to pay higher APRs.
For instance, you discover an APR range on unsecured loans between 6% to 24%. Now if your credit score is between 670 – 739, you might get away with 14% APR on a Rs 16 Lakh loan. Your EMI will depend on the loan tenor. For a 4-year tenor, your EMI would be close to Rs. 34,000. You can easily calculate your unsecured loans installments and eligibility by using the Bajaj Finserv EMI Calculator.
How much personal loan can I get with my salary?
Final approval of an unsecured loan amount depends on your overall creditworthiness and not just the credit score. A lender reviews –
- Gross monthly income
- Credit history
After analysing the borrower’s capacity to repay the personal loan, they will start the approval process, which will also consider his/her debt-to-income ratio. By rule, a prospective lender might demand this ratio to be less than 36%.
How much personal loan can you get on your salary depends on numerous pointers that a lender will consider before disbursing you the loan amount. Unsecured credit like personal loans can provide the vital option to finance a specific purpose in case of a financial crunch. If you’re thinking – how much personal loan can I get, you should consider the numerous factors including your income. Although the latter can act as the single most vital criteria, meeting other pointers will help in approval as well as in availing the best loan terms and features.