How Much Personal Loan Can You Get on a ₹50,000 Salary?

If you're earning ₹50,000 a month and considering a personal loan, understanding your eligibility is crucial. Lenders use various methods to assess your repayment capacity, primarily focusing on your net monthly income (NMI). Let's break down how much personal loan you might be able to secure.

Understanding Loan Eligibility Calculations

Lenders typically employ two main methods to determine your personal loan eligibility:

1.The Multiplier Method

This is a common approach where lenders multiply your net monthly income by a specific number, usually ranging from 10 to 24. For instance, if a lender uses a 15x multiplier, a monthly salary of ₹50,000 would make you eligible for a maximum loan of ₹7.50 Lakh (₹50,000 x 15). It's important to note that this calculation assumes you have no existing loan repayment obligations.

2.EMI/NMI Ratio

This method evaluates what percentage of your income would go towards Equated Monthly Installments (EMIs). Most lenders prefer your total EMI burden (including the new loan's EMI) to be under 50-60% of your NMI. 

If you already have existing loans, the new loan amount will be adjusted downwards to ensure your overall EMI/NMI ratio stays within the bank’s limits.

Loan Interest Rates and Charges on Personal Loan

A personal loan of ₹50,000 comes with specific interest rates and charges:

• Personal Loan Interest Rate: Starts from 13% p.a. onwards for some banks.
• Processing Fees: Up to 5% of the total loan amount + GST.
• Loan Tenure: You can get a loan for up to 60 months (5 years).
• Lowest EMI: For every ₹1 Lakh borrowed over 60 months, the lowest EMI is ₹111.2.
• Prepayment Charges: If you decide to pay off your loan early, charges can range from 0-7%.
• Late Payment Charges: Missing an EMI can incur significant penalties, up to 3% per month (36% per annum) on the overdue amount, calculated daily until actual payment.

Salary Requirements Across Banks and NBFCs

While the multiplier method gives a general idea, specific banks and Non-Banking Financial Companies (NBFCs) have their own criteria and maximum loan amounts:

Note: These figures are indicative and keep changing. Contact your preferred bank for getting additional information.

It's clear that while a ₹50,000 salary might open doors to a loan of ₹7.50 Lakh based on a 15x multiplier, your final eligible amount can vary significantly based on the lender's specific policies, your credit score, and existing financial obligations.

Read more: 8th Pay Commission Calculator: What ₹21,700 Basic Pay Looks Like with 1.92x, 2.0x, and 2.86x Fitment Factors 

Conclusion

With a ₹50,000 monthly salary, you have a good chance of securing a personal loan. While a rough estimate suggests up to ₹7.50 Lakh based on a 15x multiplier, the exact amount will depend on the lender's internal policies, your debt-to-income ratio, and your credit history. Always compare offers from multiple banks and NBFCs, and carefully consider the interest rates, processing fees, and other charges before committing to a loan. 
 
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.