Find out the maximum Personal Loan amount you can get.
A Personal Loan acts as an excellent facility during financial contingencies. A type of unsecured loan, Personal Loans are collateral-free, and banks sanction them after assessing your credit history and income details. If you need a Personal Loan and are wondering about the maximum Personal Loan amount you can get, this article is for you.
Banks determine your Personal Loan limit based on several factors as under:
Considering the above factors, you can mathematically estimate the Personal Loan maximum limit using the following ways:
Lenders use the multiplier method to calculate the Personal Loan amount. This method considers factors like your salary, employer reputation, etc. and includes a simple formula:
Loan Amount = (Net Monthly Income) x (A Number from 9 to 18)
Banks will determine the number from 9 to 18 depending on your credit history and your employer's reputation.
For instance, you earn a monthly salary of INR 50,000. Assuming that the basic multiplier is 18, your Personal Loan maximum limit would be INR 900,000. If you have an existing debt of INR 10,000 every month, the loan eligibility would be (50,000 – 10,000) x 18 = INR 720,000.
Banks use the FOIR method to analyse your repayment capacity. It is the percentage of your fixed obligations to your monthly salary. The formula for FOIR is
FOIR = (Sum of existing fixed obligations/Net Take Home Monthly Salary) x 100
Generally, lenders expect all your debt obligations to be paid from 50% of your salary. For example, you earn INR 35,000 per month, and your ongoing debts are INR 15000 and INR 5,000 for home and car loan EMI, respectively.
Therefore, FOIR = [(15000 + 5000)/35000] x 100 = 57.14%.
Your FOIR exceeding 50% puts your loan application in jeopardy.
Check your eligibility with digibank Personal Loan Eligibility Calculator.
Here are ways to increase your chances of getting a higher loan amount:
Personal Loan eligibility is related mainly to your credit score and monthly income. Ultimately, lenders provide loans to earn profits on their investments. If you can convince the lender about your repayment abilities, you can obtain the maximum personal loan amount required and get the loan sanctioned.
Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page. Also, you can open bank account online with us.
*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.