There is a popular myth that the highest loan amount you can get is based solely on your current salary. However, you can maximise Personal Loan amount by applying with a high credit score, reducing your existing debts, and various other factors that lenders evaluate beyond your monthly income.
If you’ve been looking around for practical ways to maximise your Personal Loan offer on your current monthly income, then you’re at the right place. In this guide, we’ll walk you through the various factors that influence your Personal Loan amount apart from your income.
Read on for actionable tips to maximise your Personal Loan amount on your current salary.
Wondering Why Your Personal Loan Offer is Low?
Applying for a Personal Loan with your current salary and without consideration of factors like credit score, debt-to-income ratio, employment type, credit utlisation, etc. can lead to a lower Personal Loan offer amount.
If you’re holding a Personal Loan offer with an amount that is lower than your desired amount, then chances are one of the following aspects that demand improvement:
- Credit Score and Report
- Income and Employment
- Existing Obligations
Tips to Maximise Personal Loan Amount on Current Salary
Now that you know that multiple factors influence the maximum Personal Loan amount that you can get, here are a few useful tips to maximise the Personal Loan amount on your current salary.
Apply with a high credit score: A CIBIL score of 750 and above is imperative to get a Personal Loan approval for the maximum amount. Hence, it is always recommended to apply for a Personal Loan with a high credit score.
You can check your credit score for free on the Poonawalla Fincorp website.
Reduce existing obligations: Having a high proportion of existing financial obligations compared to your net monthly income reduces your disposable income. Lenders perceive this as detrimental to monthly repayment capacity and therefore fixing this naturally increases the chances of maximising your Personal Loan amount.
Opt for a longer loan tenure: A Personal Loan with a longer repayment tenure is generally associated with a lower monthly EMI amount. Hence, opting for a longer EMI tenure improves your monthly repayment capacity even without an increase in salary. This can qualify you for the maximum Personal Loan amount.
Show stable income: Having a stable source of income reflects consistent repayment capacity. Always ensure that you have the proper documentation to show case stable source of income to qualify for the maximum Personal Loan amount.
Factors That Influence Your Personal Loan Amount
As stated before, your current monthly salary is not an isolated factor governing the maximum Personal Loan amount you can get approved for. There are various other factors that lenders assess before underwriting your final Personal Loan amount.
Some of the most influential factors include the following:
Credit Score
Not only your credit score, but your overall credit report has a significant impact on the maximum Personal Loan amount you can qualify for. While your credit score is an indicator of your overall creditworthiness, lenders also go into an in-depth analysis of your past repayment behaviour, days past due (DPDs), write-offs, credit utilisation, etc.
A CIBIL score of 750 and above is considered good by most banks and NBFCs in India and makes you eligible for the maximum Personal Loan amount.
Debt-to-Income and FOIR
Your existing debts and monthly obligations are yet another important factor that greatly influences your maximum Personal Loan amount. This is because existing obligations are perceived as reducing disposable income.
This is why lenders calculate your Debt-to-Income Ratio (DTI) and Fixed Obligation to Income Ratio (FOIR). Ideally, your DTI ratio and FOIR should not be more than 30%-40% leaving you with ample disposable income to repay a loan conveniently.
Employment Type and Stability
Besides your current monthly income, lenders also evaluate your employment type and stability of employment to determine the maximum eligible loan amount for your Personal Loan application.
For example, a salaried individual with a fixed monthly income (supported by recent salary slips) may be eligible for a higher loan amount compared to a self-employed individual with fluctuating monthly income.
Credit Utilisation
Your credit utlisation can influence your Personal Loan approval by a significant extent. Credit utilisation is the percentage of available credit that you have already used and is yet to repay.
For example, if you’ve a credit card with a credit limit of ₹1,00,000 and you spend ₹50,000 from it, your credit utilisation becomes 50%.
A high credit utilisation is perceived as a red flag by lenders and deters Personal Loan approval for higher amounts. Your credit utilisation must always be below 30%.
To Conclude
Personal loans can be a quick funding source for almost all kinds of needs. However, without the desired amount, many can find it challenging to fulfil their needs adequately. It is possible to maximise your Personal Loan amount even on your existing salary by applying with a 750+ credit score, reducing existing obligations, lowering your credit utilisation and showcasing stable income and employment.
You can get up to ₹50 Lakhs as maximum Personal Loan amount from Poonawalla Fincorp with flexible EMI tenure of up to 84 months for salaried individuals. Apply now and take control of your finances with a maximum Personal Loan amount.
Frequently Asked Questions
How much maximum Personal Loan amount I can get with my current salary?
You can get a maximum Personal Loan amount of up to ₹50 Lakhs from Poonawalla Fincorp. Having a high credit score with a healthy credit report, minimum existing financial obligations, and a stable source of income also determines the maximum loan amount, besides your current salary.
How can I increase my Personal Loan amount?
You can increase your Personal Loan amount by applying with a 750+ credit score, reducing your existing debts, and showcasing stable income and repayment history.
What is the minimum CIBIL score required to get the maximum Personal Loan amount?
You must have a minimum CIBIL score of 750 or more to qualify for the maximum Personal Loan amount from any bank or NBFC. However, the final amount is also dependent on other factors such as your income, debts, repayment history, lenders’ internal policies, etc.
How can I get favourable terms on a Personal Loan?
You can get a Personal Loan on favourable terms and conditions by maintaining a high credit score, showcasing a stable income level, and having very good and timely repayment behaviour.
What are the minimum eligibility criteria to qualify for the maximum Personal Loan amount?
To qualify for the maximum Personal Loan amount from Poonawalla Fincorp, you must be an Indian citizen in the age range of 21 to 60 years, have full-time employment with one of the recognised employers, with at least one year of work experience and a minimum salary of ₹30,000.
Does a high credit utilisation affect the Personal Loan amount?
Yes. A high credit utilisation of 30% or more shows that you are unable to repay your credit card dues and is highly reliant on credit. This lowers the chances of approval for the maximum Personal Loan amount.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply
