Everyone these days is striving to upgrade their lifestyle with high-tech gadgets, luxury cars, cosmetic surgeries, and even planning an annual international trip. But then, not everyone has sufficient funds to fulfill these desires. That is where Personal Loans can help.  

Earlier, people considered taking a loan as a last resort to cover their big-ticket expenses. However, over the last few years, people have become more comfortable taking loans and paying for their costs instead of shelling out their savings. A Personal Loan is one of the most popular funding options that people take for their regular expenses, like travel, education, home repair, wedding, or medical emergency. Besides providing cash in hand in times of financial need, these loans also give a chance to improve the credit rating.

Although many financial institutions have made it easier to get loans with competitive interest rates, simple eligibility checks, and minimal documentation, many people want to know “how much Personal Loan can I get on my salary”. Well, that depends on your salary and finances. Lenders rely on your salary to check if you can repay the EMIs on time. A decent salary projects you as a low-risk borrower, and the lender approves your loan quickly. However, salary is not the only factor lenders determine while evaluating a personal loan application. Let’s look at other factors that come into play.

Why does the Salary Matter for Personal Loan Approval?

As mentioned earlier, your income represents your repayment capacity. Your monthly cash inflow is an integral part of your financial profile. Your income is directly linked to your capability to repay the borrowed personal loan. A decent monthly income from a constant source will assure the lenders of timely EMI payments, increasing your affordability and making EMIs easier to repay. Although some lenders may offer you a low salary personal loan, they may have different interest rates, as well as stricter eligibility and documentation requirements.

Other Determining Factors

Besides income, lenders approve loans based on several other factors. Therefore, asking “how much Personal Loan can I get on my salary” is an incomplete question. Let’s look at the other factors that affect your loan approval.

Financial Obligations

Lenders assess your finances in the backdrop of your salary, income sources, existing financial obligations, dependents, and duration. One thing they want to ensure is a sufficient surplus after paying loan EMIs. Those with a high debt-to-income ratio may find EMI payments challenging and are more likely to default. However, if it is lower than 40-50%, the lender may easily consider it good financial health and approve the loan.

Additional Income Sources

While providing income details to the lender, you must show additional income sources, including your leased-out properties, part-time business income, spouse’s salary, etc. Additional income sources improve your eligibility by assuring lenders of timely due payments. They indicate a better repayment capacity, as you have more than one income source to tap into. That is why many prospective borrowers opt to apply for a joint loan. Co-applying for a loan combines applicants’ monthly incomes and makes them eligible to afford a bigger loan.

Credit Rating

Lenders check your credit history to get an idea of your repayment behavior in the future, based on the pattern you used to settle your past loans. Regularity and punctuality in the past loan EMI payments project you as a responsible borrower. On the other hand, delay or default in the past may make loan approval more difficult.

Many people believe they will get a loan quickly because they have never borrowed money in the past. However, not having a credit history does not help, as there is no way for the lender to check how the applicant handles credit. Those who do not need a loan may build a credit history by using a credit card with no payment default and outstanding balance.

Want to know “how much Personal Loan can I get on my salary”? Maintain a credit score of 725 or above to get a decent amount. A favorable credit rating favors you as a safe borrower with a clean repayment history devoid of defaults. On the contrary, a low credit score increases the likelihood of having the loan rejected.


Financial institutions weigh your current engagement and employment history to ensure income reliability and stability. The lender wants to ensure that your employer is financially sound without any history of delaying employees’ salaries. Job stability matters too, which is why those employed in government jobs have an added advantage over private companies and self-employed professionals.

Those working in private limited companies and public sector undertakings have equally good chances. Self-employed professionals like CAs, doctors, and engineers are safe borrowers that most lenders prefer. The idea is that a borrower’s capacity to repay the loan depends on their income, so the source should be consistent and reliable. Financial institutions prefer applicants with a more extended work experience in the same company, as it establishes income stability.


Your age is a crucial factor in determining “how much Personal Loan can I get on my salary”, as it indicates your financial stability. People usually start working in their 20s and gain 5-6 years of experience by the time they turn 30. So, individuals in this age group are financially more stable and move up the corporate ladder with increased salaries. However, as age increases, they are left with less earning time to repay the loans. That is why loan applications near retirement are likely to face rejection.

Repayment Tenure

Choosing a shorter repayment tenure improves the chance of getting Personal Loan approval. A Personal Loan EMI calculator helps determine a suitable loan term with EMIs easily adjustable within the borrower’s monthly budget. Keeping it short is the key to seeking loan approval from the lender.

Besides these crucial factors, your existing relationship with your current lender also counts. Long-time customers have better chances of getting a loan approved, particularly those with a clean record of timely payments. Want to know “how much Personal Loan can I get on my salary”? Familiarising with these factors helps the lender determine your current finances and take their loan decision.

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