How Much Personal Loan Can I Get on 50000 Salary

The personal loan amount you can get on a salary of Rs. 50,000 depends on the lender’s policy and other factors like your age, job type, credit score, and so on.

Lenders are hesitant to approve loan applications if the borrower’s income or credit score is too low or if a substantial part of their income is going into repaying existing loans.

The credit score showcases the creditworthiness of a borrower. It ranges from 300 to 900, and a score of 750 or more is usually considered good for a personal loan. The higher the credit score, the higher the chances of a loan being approved at lower interest rates.

Some lenders may offer flexible loan amounts up to Rs. 30 Lakhs or above to people with a monthly salary of Rs. 50,000. Others may sanction a multiple of the borrower’s monthly income as a personal loan, which can vary between 10 to 20 times depending on the lender’s policy. 

The borrower’s credit score may also affect the multiple. 

You can easily calculate your personal loan eligibility online with the Personal Loan Eligibility Calculator tool. 

How does a lender decide on how much loan amount to be sanctioned to an individual earning a monthly salary of Rs. 50,000?

Lenders usually follow two methods for calculating the personal loan amount eligibility of an applicant - the Multiplier Method and the Fixed Obligations to Income Ratio (FOIR) Method.

Multiplier Method

Under the Multiplier Method, banks sanction a multiple of the monthly income of a borrower as a loan. The multiple can vary anywhere between 10 to 20 times, depending on the lender’s policy. For example, an applicant with an income of Rs. 50,000 per month can get a personal loan of Rs. 5,00,000 Lakhs to Rs. 10 Lakhs.

The multiple will be higher depending on the credit score of the applicant. A person with a CIBIL score of above 750 can expect 20 times their monthly salary (i.e. up to Rs. 10 Lakhs) as a loan, provided they do not have any existing loan.

Fixed Obligations to Income Ratio (FOIR) Method 

Under the FOIR Method, lenders look at the total monthly obligations of a borrower like equated monthly installments (EMIs), credit card bills, and rent as a percentage of their monthly income. Unlike the multiplier method, banks will also assess the fixed expenses of the borrower.

The percentage of FOIR is calculated by dividing the total fixed monthly expenses of the borrower by their monthly income and multiplying it by 100. Lenders look for borrowers with a ratio or percentage of less than 50%.

With a monthly income of Rs. 50,000, the applicant’s EMIs and other fixed expenses should not go above Rs. 25,000 per month. 

Assuming the bank prefers a FOIR of 50%, and you have existing monthly obligations of Rs. 10,000, the calculation for a Rs. 50,000 salaries will be 50% of Rs. 50,000 (i.e. Rs. 25,000) minus Rs. 10,000, equaling Rs. 15,000. This Rs. 15,000 will be the maximum EMI you are eligible for under the FOIR method.

Other Factors Impacting the Loan Amount for Rs. 50,000 Salary

Not just the total loan amount but also the rate of interest on the loan is determined by lenders depending on their assessment of the borrower’s repaying capacity. Personal loan interest rates generally vary between 10% to 20% p.a. So, if an applicant has a low income or CIBIL score, the chances are that the rate of interest on their loan will be high.

Eligibility Criteria for Personal Loan with Rs. 50,000 Salary

• Applicants must be aged a minimum of 21 years when applying for the loan.
• Applicants should not be aged above 60 years when the loan matures.
• The minimum net monthly income of the applicant should be at least Rs. 15,000.
• Salaried as well as self-employed individuals can apply for a personal loan.
• A CIBIL score of 750 or more is preferred.

You can check personal loan eligibility by using the Personal Loan Eligibility Calculator. 

Documents Required for Personal Loan for Rs. 50,000 Salary

To apply for a personal loan for Rs. 50,000 salary, you may need to provide the following documents: 

• A completed loan application form along with a recent coloured passport-size photograph 
• Identity proof, such as a Driving License, Passport, PAN Card, or Aadhaar Card 
• Address proof, such as a Driving License, Passport, Ration Card, Aadhaar Card, or Utility Bills 
• Income proof, such as bank statements for the previous 3 months, or a passbook for the previous 6 months 
• 2 recent salary slips, or a current salary certificate with the latest Form 16 
• Ownership proof
• Proof of end-use

Note: This is an indicative list. The lender may ask for additional documents on a case-to-case basis.

How to Apply for a Personal Loan with a Salary of Rs. 50,000?

• Visit the official website or download the mobile app of the lender.
• Fill in the personal loan application form online by providing the required personal loan details like your mobile number, full name, email ID, etc.
• Verify your income online or upload the bank statements and salary slips for the last 6 months.
• Complete Video KYC or e-KYC.
• Provide your basic employment details.
• Select the preferred personal loan amount and tenure. 
• You will be able to see the details of your loan EMI. Click on “Apply Now”.
• Congratulations! Your loan application is submitted, and the approved loan amount will be transferred to your account within a few hours of getting approval.