Personal loan in India has become a good option for those who are looking for funds for expenses like medical expenses, home repair or even travel. Banks often pay attention to people with stable income and strong credit profiles to provide personal loans. Therefore, banks and non-banking finance companies (NBFCs) like salary on salary are more liked.
If you earn Rs 40,000 per month and are thinking how much personal loan you can get. So let’s see which loan options are available for you.
Factors affecting personal loan eligibility
Lenders check many parameters to understand your loan amount and repayment capacity, including:
- Income: Your income plays a special role in fixing the eligibility for personal loans. There is usually the possibility of getting more loan amount on more salary. You can also get a good loan amount at a monthly salary of Rs 40,000, provided that your credit score and age are according to the criterion of the lenders.
- Credit score: A high credit score suggests that you repay the loan and credit card bills on time, which reduces the risk of banks. The higher your credit score, the easier it will be to approve the loan. You can also get a loan of more amount with good credit score.
- Age: The age of the application should usually be between 21 and 60 years.
- Current financial burden: If you have existing loans or monthly financial commitments (eg EMI), it can affect your loan amount. Landers check your date-to-incomplete ratio. This shows whether you will be able to manage the loan properly or not.
How much loan can you get at a salary of Rs 40,000?
Once you understand the factors that affect the loan eligibility, the next question comes that how much personal loan you can get on a salary of Rs 40,000.
Landers use these two primary methods to calculate personal loans:
Multiplier method
Multiplier methods use the lenders personal loan to calculate the eligibility. In this method, the loan amount is decided by multiplying your net monthly income from the predeed factor. It is usually 10 to 24 times the monthly income of your monthly income, which depends on financial institutions, your job profile and financial status. For example, if there is a monthly salary of Rs 40,000, you can qualify for a loan between Rs 4 lakh and Rs 9 lakh. However, the amount may vary depending on your credit score and other factor.
EMI/NMI ratio
EMI (Equated Monthly Installation) to NMI (Net Monthly Income) Ratio is another method to decide the loan eligibility. This ratio tells about your current financial liability and how much EMI can afford every month for a new loan. Ideally lenders prefer EMI/NMI ratio of less than 50%, which means that your total monthly EMI payment should not exceed 50% of your net income.
Where can I get a personal loan at a salary of Rs 40,000?
If you earn Rs 40,000 a month, you can contact many financial institutions for personal loans. As:
- Bank and Financial Institution: Most of the banks and financial institutions in India give personal loans to those who earn Rs 40,000 a month or more. But before taking the decision, please compare the terms, interest rates and repayment options of the loan.
- Online lenders: Apart from banks, you can also take personal loans through online lenders and fintech platforms. In these platforms, the need for documentation is very low and their processing time is very fast. For example, Moneycontrol provides 100% digital and instant personal loans. Moneycontrol offers personal loans up to Rs 50 lakh in partnership with 8 leading lenders. Its interest rates start at 10.5% annually.
Eligibility Criteria for Personal Loan
If your salary is 40,000 rupees a month and you are thinking of applying for a personal loan, then the eligibility criteria of the lenders will have to be completed.
Requirement of different institutions may vary, here are some general conditions:
- Income: Usually a minimum monthly salary of about 25,000 rupees is required. However, this amount may vary from each lender.
- Age: Applicant should be between 21 and 60 years old.
- Credit score: To qualify for personal loans, a CIBIL score of 750 or more is usually required.
- Employment type: Salared Employee or Self-Emploid can apply for personal loans based on the conditions and rules of both lenders.
Document for personal loan
Minimum documents are usually needed to process personal loan applications. Most of the lenders ask for these documents:
- PAN card
- Aadhar card
- Bank statement (last 3-6 months)
- Salary Slip (last 3-6 months)
Summary
Do you earn 40,000 rupees every month? Find out how much personal loan you can get and learn about the flexible option with compatible interest rate.
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.