How Much Personal Loan Can I Get on My Salary

There is an important relationship between your salary and the personal loan that you can get. Personal loans are unsecured loans. So you do not have to put any security or asset as collateral for getting the loan. Therefore, your income or salary and your credit score are the two bases on which the lender takes the decision of whether to give you the loan or not. These factors also determine the amount of personal loan that the lender will be willing to extend you.

There is direct relationship between salary and personal loan

The relationship is simple and obvious. The higher your salary, the more will be the personal loan that you will be able to get, and vice versa. A higher salary also lowers your credit risk in the eyes of the lender. Credit risk is the risk of you defaulting on your principal or interest obligations when they become due. A lower credit risk will result in a lower interest rate on the personal loan that you take.

There is no fixed amount that you can surely get on a given level of salary. The lender will consider factors such as your credit score, nature of your employment, sector or company where you are working etc., while determining the maximum amount of loan that it will give you, given your current salary.

Many lenders have minimum salary requirement for getting a personal loan from them. This requirement now ranges between Rs 25,000 – Rs 35,000. You should have this much monthly salary to get a personal loan.

The maximum personal loan that you can get is also dependent on your salary or income. The higher is your salary, the more is the amount that you can raise, through personal loan. Lenders deduct your essential monthly expenditures to calculate your net disposable income. The decision to lend to you and the amount of the loan is based more on this net disposable income. A higher salary also increases your net disposable income.

Secured loans, such as gold loan, a better option when salary is low

If your salary is low ,then you do not have to lose heart. Instead of going for a personal loan, you can go for a secured loan such as gold loan. You can get gold loan from a company such as IIFL Finance. Your salary is not considered a factor in gold loan. You just have to come and put gold or gold jewelry as security. You will get loan up to 75% of the value of the jewelry. The interest rate that you will have to pay on this loan will also be much lower than the interest that you will pay on a personal loan. Once you pay back the loan, you will also get back the gold jewelry that you kept as security for the loan.