There comes a time in every working professional’s life when we need a personal loan. The situation might be a cash crunch, or a sudden medical emergency which has presented itself, and where we need to make a deposit before our medical insurance can take care of the rest. 

Whatever might be the situation, one common aspect that remains the same is the fact that borrowing from friends or family is not an option, and thus, the natural (and by far the best) resort is to take a personal loan. But if you know anything about personal loans, one common thought that must have come to your mind is the fact that how much amount can I avail from a personal loan based on my salary?

If you have been planning to get a personal loan for some time now and this question is pondering your mind, then this article is for you. In today’s article, we will give you a quick refresh on all you need to know about personal loans in India and also the amount you can avail based on your monthly salary. So without further ado, let’s get started.

What Is a Personal Loan?

One of the first and most important aspects we need to understand and take into consideration is the meaning of a personal loan. In simple terms, a personal loan can be understood as a financial instrument wherein a borrower can avail a certain amount of loan, based on their creditworthiness. Unlike other loans in the market, one of the most attractive features of a personal loan is the fact that it is an unsecured loan, meaning that you do not need to put forward any collateral or pledge any asset in order to take this loan.

Additionally, personal loans in India come with one of the lowest rates of interest, a flexible repayment system, and wider acceptance for first-time borrowers as well as borrowers with poor credit history.

Getting Your Loan Application Approved: Factors to Keep in Mind

Now that you have a better understanding of what a personal loan is, let us take a look at some of the factors which determine the approval of your application as well as the total amount of loan you can avail.

Credit Score

One of the first and most important factors that are taken into account is your credit score. Since personal loans are unsecured by nature, most lenders often emphasize on your credit score because it is a clear indication of your creditworthiness as well as repayment discipline. However, most new-age lenders like Money View also have their own credit rating factors, which are designed in a manner such that even borrowers with lower credit scores can get access to the system.

If you are not aware of what credit score is, here is a quick recap. Your credit score, in the simplest of terms, is a numerical number that is assigned to you by credit rating agencies (like CIBIL and Experian in India) after taking into consideration four main factors which are:

  1. The number of loans you have taken in the past 
  2. The total amount you currently owe
  3. The number of timely payments you have made in the past 
  4. The occurrence of any missed payments

Taking all these factors into account, both CIBIL and Experian give you a credit score on a scale of 900. Generally, it has been observed that a credit score above 750 is treated as good and will make it easier for you as a borrower to get your application approved. 

Your Monthly Income

The second factor that is taken into account by lenders is your monthly income. Generally, it has been observed that lenders prefer borrowers who are employed full-time over those who are working part-time or self-employed mainly because of the fact that the risk associated with giving out loans to full-time employees has much less risk as compared to loans for self-employed. Along with this, for employed professionals, the higher your net monthly income, the higher will be the loan amount you will get approved for. 

But how exactly can you know how much money you will be able to get based on your salary? Let us understand this better with the help of an example. Suppose you are an employee at an organization X, and you have a monthly salary of 50,000 in hand after taxes. When you approach a personal loan lender for a loan and share your income details, the lender will generally approve a loan amount whose EMI is less than or equal to 50% of your net monthly income.

For example, suppose you apply for a loan of ₹150,000 from Money View. Upon receiving your application, the EMI calculation will be:

  • Principal Amount: ₹150,000
  • Interest Rate: 1.13%
  • Tenure: 24 months

EMI Amount: ₹6324

Thus by paying an EMI of ₹6324 every month, you will settle the principal amount of ₹150,000 plus the total interest amount of ₹1772. 

The reason why lenders want to keep your EMI amount below 50% of your monthly income is that in case it exceeds this threshold, the chances of you defaulting on your loan are higher, and in such cases, the lender naturally will want to reduce their exposure to loss.

If you want to get a rough estimate of how much loan you can get based on your salary, just take into consideration the factors listed above, search for an EMI calculator, and reverse engineer it to see if it matches the lender’s criteria. However, do keep in mind that this is only a rough estimate and not the actual amount you will get approved, and only upon completion of your loan application will you be able to know how much you can get. 

Tips to Get Your Loan Approved

Now that you have a better idea of the amount of loan you can get based on your salary, here are some tips to help you get your application approved faster.

Maintain a Good Credit Score and Credit Report

As I mentioned before, lenders will highly emphasize your credit score when reviewing your application, and thus if you want your loan application to get approved quickly, make sure that you keep a credit score of above 750 on both Experian as well as CIBIL.


The higher your credit score, the higher will be the loan amount you get approved for, and the lower will be the interest rate on your loan.


Along with this, make an effort to keep your credit report neat and easy to approve. In order to do this, just make sure that you make all your payments on time, pay the interest amount on your loans, avail only 20 to 30% of the credit limit approved to you, and also keep hard inquiries to a minimum.


Approach the Lender Directly

The second tip to get your loan application approved is to approach the lender directly. At present, there are multiple comparison websites, where not only can you compare the various loans on offer, but also put forward your application via the website. If you want your loan application to be approved quickly, it is always a better practice to approach the lender directly and not through a middle man.


When you are a salaried professional, getting a personal loan becomes easy; just keep the tips shared above in mind, and you will be good to go. All the best!

Author Bio: Surya Patra is a qualified webmaster by profession and Marathon Runner/Cyclist by passion with more than 6+ years of expertise in the financial domain. Surya is also an entrepreneur, enthusiastic in storytelling, content writing, and digital marketing professional.