Income is one of the most vital eligibility criteria for getting a personal loan in India. There is no such specific requirement that decides the amount of loan on the basis of a particular amount of salary. Income plays a vital role. However, there are other eligibility criteria and factors that are considered by the loan provider as well. You can check the amount and charges with the help of a personal loan calculator. In that case, if you have a 50,000 salary, you may not get a 10,00,000 personal loan just because your credit score is below 500. All the eligibility criteria like credit profile, income, credit utilisation ratio, credit score, and employer together decide the amount of loan that an individual is eligible for.
Therefore, when you are earning 50,000, it does not decide that you will be able to get a particular amount of loan on the basis of your income. The personal loan providers check every aspect for an equal balance at the time of deciding the fate of the loan application. However, if you are earning around 50,000 a month, along with a good credit history and credit profile, it will be easy for you to get a loan of anything between 20,000 and 45,000 a month. Since the personal loan repayment will be done with the help of monthly installments, an individual earning 50,000 a month is eligible for an instant personal loan provided the individual meets all other eligibility criteria. Therefore, if you want a personal loan, you need to fulfil all of the below-mentioned eligibility criteria and factors as discussed.
- A credit score is one of the most vital and crucial aspects that decides whether an individual is eligible to borrow or not. The three-digit score determines the eligibility of the individual based on past experiences and transactions. A credit score takes into consideration past repayment history, payment track record, credit utilisation ratio, credit account and financial history. Therefore, an individual will only have a good credit score if they have taken care of their finances in the right order and have made loan repayments in a responsible manner in the past. Based on this information and your good credit score, a personal loan will be easily approved at a low rate of interest because the risk will be minimal. On the other hand, if an individual does not have a good credit score, it will involve a lot of risk, and the loan provider may not approve the loan application.
- The credit utilisation ratio is an important factor in determining whether or not a person is qualified to take out a new loan.It is the ratio between the total credit limit offered to the individual and the credit limit that has already been exhausted by the borrower. The ideal credit utilisation ratio is below 50%, which means that the individual has good financial stability. However, if you end up exhausting all the available credit limits, it speaks of poor financial stability and looks like the borrower is always in need of funds, making it risky for the loan provider to offer a new loan. Therefore, to be eligible for a personal loan, you need to make sure that your credit utilisation ratio is below 50%.
- Income is directly related to whether you will get a loan or not. If you do not earn sufficiently, it will become impossible for you to repay the loan within the loan term. This makes it difficult for a loan provider to approve your loan request. Therefore, if you are thinking of getting a personal loan, you need to boost your income with the help of extra sources so that the loan provider is able to trust you and get you a new loan. Income is always inclined towards meeting daily expenses and fixed obligations every month. Therefore, with a low income each month, it will be difficult for an individual to meet daily obligations as well as pay monthly instalments for a personal loan. Therefore, unless the loan provider finds that your income is sufficient enough, you will not be getting a personal loan.
- Employers play a significant role in the personal loan approval process. If you are working for a government agency or a multinational company, it signifies growth and stability in income. Reputable agencies or companies will always offer salaries on time and offer various scopes and opportunities for individuals to increase their salaries. As a result, loan providers will always trust individuals working for a reputable organisation in offering personal loan for salaried over individuals working for small or startup businesses. Start-up companies are the growing ones that may not make timely salary payments, which makes it difficult or risky for loan providers to trust and offer a loan to an individual working for a start-up company.
If you want a smooth personal loan application process, make sure you meet all the eligibility criteria and the prerequisites as decided by the loan providers. If you are earning 50,000 a month, that is a good amount, but you also need to focus on other credit eligibility criteria to get an instant personal loan online.