What is the maximum amount I can get based on my earnings (personal as well as residence)?
The personal credit available to salaried persons is mainly based on their income and expenditure. Most banks will require a minimum payment of Rs. 20000 to qualify for personal loans for salaried individuals. There are different requirements to be met about private and homeowner loans that we’ll be discussing here.
Personal Loan for Salaried People
The majority of banks use the below two approaches to calculate the permissible amount of a loan –
- Multiplier method
- Fixed Obligation Income Ratio
Multiplier Method of Calculating Eligible Personal Loans for Salaried People
When using the Multiplier method for formulating the eligible loan amount, the income the applicant earns per month can be divided by 27. Then the amount that results is granted for a period that is 60 months. Let’s look at the following example
Case 1
Monthly income of Rs. 30,000
Eligible loan 30000 (27x 30,000) = Rs. 8,10,000
Case 2
Monthly income of Rs. 40,000
Eligible loan – 40,000*27 = Rs. 10,80,000
Fixed Obligation Income Ratio is a method for calculating Eligible Personal Loans for Salaried people.
In the Fixed Obligation-Income Ratio (OIR) method for calculating eligible loan amounts, the banks also consider financial obligations before they approve the loan amount. The responsibility is removed from the month’s income and increased by 27. Let’s look at the following example:
Case 1
Monthly income of Rs. 30,000
Financial obligation – Rs. 10,000
Eligible loan (30,000-10,000) (27-27 = Rs. 5,40,000
Case 2
Monthly payment: Rs. 40,000
Financial obligation – Rs.10,000
Suitable loan (40,000-10,000) (27-28 = Rs. 8,10,000
Home Loan for Salaried People
For salaried individuals, home loans are typically easy to get approved when you have a steady income, a minimum amount of financial obligations, and work for a reputable organization. Eligibility for home loan requirements differs from one bank to the next and is determined by the bank’s discretion. We will examine the eligibility criteria of different significant banks.
