A personal loan is an unsecured loan offered by banks, financial institutions and online loan apps to meet your immediate cash requirements during a crisis. Since these loans are unsecured, they do not need any form of guarantee or collateral. The lender offers these loans based on your income, credit score and repayment capability. The most important parameter in determining your loan amount is your income.
Ususally, the minimum salary requirement specified by most lending institutes is Rs. 15,000. But this amount differs from lender to lender. For most online loan apps, it is Rs. 15,000.But for conventional lenders this amount could go up to Rs. 25,000. The higher your salary, the better is your loan eligibility.
So, if you have a fixed monthly salary of Rs. 50,000, you can easily apply for an online loan through a money loan app. However, the loan amount that you would quality for would also depend on your credit score, on-going debts, fixed obligations, job stability, and years of service left.
Read on to estimate your personal loan amount eligibility on a salary of Rs. 50,000.
How Much Personal Loan Can I Get On 50000 Salary?
Every lender follows a standard method to calculate your loan amount eligibility. The two mostly used methods to calculate loan amount eligibility are – multiplier method and the FOIR method.
Multiplier Approach
The multiplier approach is used by most financial institutions to determine the maximum loan amount for a declared income. The maximum loan amount that an individual could qualify for is 20 to 30 times their net monthly income (NMI). This method is ideal for calculating loan eligibility amount for people who do not have any on-going debts or obligations.
Thus, for a salary of 50,000, the maximum personal or online loan amount ranges from Rs. 10 lakhs to Rs. 15 lakhs. This amount depends on your choice of loan tenure and considering you do not have any on-going debts.
Fixed Obligations to Income Ratio (FOIR)
Banks and other financial institutions also use the Fixed Obligations to Income Ratio (FOIR) metric to determine the actual loan amount eligibility. In this method, the lender considers your fixed monthly expenses, like existing EMIs, credit card bills, rent etc. A FOIR shows an applicant’s actual available income that they can use to pay off the new EMI.
In case, your total monthly EMIs is already nearing 40 to 50 per cent, then your loan application would be rejected. For any lender, your total monthly obligations, should not cross 50 per cent of your total monthly income. This means if you are earning Rs. 50,000 per month, then your total monthly EMI including credit card payments should not exceed Rs. 25,000.
Suppose you have an ongoing car loan with an EMI of Rs. 15000 and you don’t have any other fixed obigations, then you will be eligible for an personal loan with EMI not exceeding Rs. 10,000.
How much personal loan should I borrow on a monthly salary of Rs. 50,000?
The first step to estimate your loan eligibility amount is to create a budget. Estimate your fixed monthly expenses, like utlity bills, EMIs, investments and obligations. Once you deduct these amount you will know the disposable amount that you can spare on a new EMI.
You can try using a credible money loan app to calculate your loan amount eligibility. Compare different lenders on the loan app and choose the one that best fits your requirements. Based on the interest rate they are offering, the loan tenure you can serve and the EMI amount that you can fit into your budget, you can calculate the loan amount.
Do remember that keeping the loan tenure and loan amount as low as possible would reduce your interest pay out and EMI burden. You will be able to close your loan account early and your eligibility for future borrowing would increase.
Eligibility Requirements for a Personal Loan or An Online Loan With A Salary of INR 50,000
Below are the requirements that must be met to be eligible for a personal loan or an online loan based on an INR 50,000 salary.
Age: At the time the application is submitted, the candidate must be between the ages of 21 and 58.
Income: Each lender has a different minimum income requirement. Some banking institutions base their minimum income requirements on the city where the applicant resides.
Employment: Self-employed professionals and salaried workers are also eligible for online loans. Salaried workers employed by PSUs, reputable commercial companies, or state/central government organizations are more likely to get approved for a personal loan quickly.
Job Stability: Salaried employees and professionals must have a minimum of one to two years of work experience, with at least six months of that time spent with their present company. Self-employed people and professionals must have been in business for at least three to five years.
Credit Score: All lenders, including the money loan apps, check your credit score before approving your loan application. Bases on your credit score they determine your interest rate and loan amount.
Debt to Income: The ratio of debt to income shouldn’t be more than 40% to 50%. Some of the lenders specify a debt to income ratio of 40% while others would accept up to 50%. But the lower it is, the higher is your chances of getting a better loan amount.
Conclusion
The personal loan amount that you are eligible for on a monthly salary of Rs. 50,000 depends on many factors. Your debt-to-income ratio, credit score, income stability, employer and ability to repay the loan affects your loan amount eligibility.
The maximum amount that you can apply for, given all the other eligibility parameters are met, is Rs. 10 lakhs to Rs. 15 lakhs. But opting for such a huge amount is a big financial commitment and it would affect your monthly budget for years. So, before you finalize your personal loan amount consider all aspects including uncertainities like job loss, another financial crisis, and medical emergencies.Try to keep the amount and tenure as less as possible.
If you need a small ticket loan amounting up to Rs. 1.5 lakh then you can go for a money loan app.Applying for an online loan through an app is easy, fast and much more convenient.
