How to Check Maximum Loan Eligibility for Personal Loan?

Before you apply for a Personal Loan, it is important to assess the eligibility criteria for the same. Though general eligibility guidelines are more or less similar with each lender, the fine details can vary significantly across the lenders. Mostly the eligibility will vary for the effective rate of interest and loan amount.

In this article we will help you understand how you can check the maximum loan eligibility for Personal Loan with your chosen lender. Assessing the pre-requisites prior commencing the loan application ensure the success, with minimum hassles.

First things first, let’s highlight the common eligibility requirements below:

1. Age: To apply for Personal Loan your age should be between 21 to 60 years. For senior citizens, separate products are generally offered and the age limit is extended.
2. Work experience/ Income: A self employed needs to be in business for at least 2 years, while a salaried should have a minimum of 1-year work experience with the current employer. The minimum monthly salary should be Rs.15000 or above.
3. Credit Score: You require 750 or more CIBIL score for stealing the best interest rate quote from the bank. However, with a host of lenders, you can certainly get a decent deal with 650 or above score as well.
4. Documentation: You require photo identity proof, address proof, and income proof to apply for a loan. Incidentally for Online Personal Loan, you only require Aadhaar and PAN to verify all these aspects.

Now the big question: How to check the maximum loan eligibility?

Well, the maximum eligibility can vary across the lenders. For example: ICICI Bank offers Personal Loans up to Rs 20 Lakh, while HDFC Bank offers up to Rs 40 Lakh, SBI offers 20 Lakh, and the IDFC First Personal Loan can be applied for up to Rs 25 Lakhs. For larger amount, the banks usually take an SOS call as per the borrower’s credit rating and bank’s credit policy.

You can check eligibility in any of the four ways discussed below:

1. Check Personal Loan Eligibility using Multiplier Method

This a simple formula to assess the loan eligibility. Different lenders share different multipliers to calculate loan eligibility. For example: SBI offers Personal Loans up to 24 times the salary. Basis your salary and employer, the bank sets this multiplier factor. This factor can range from 8 to 30.

The formula to calculate eligibility will thus be:

Personal Loan Eligibility = (Net Monthly Income) x (Multiplier)

2. Check Personal Loans using FOIR i.e. Fixed Obligations to Income Ratio

Your existing liabilities also impact your eligibility. So banks calculate your fixed obligations such as ongoing EMIs and deduct it from your monthly income to understand the new EMI you can afford.

Thus,

FOIR = (Existing Obligations/ Net Monthly Income) X 100

The FOIR should be less than 50% as lenders usually consider that half of the net income would be eventually used to pay out for regular household expenses. The rest 50% can be used to repay bank commitments and future goals.

These are two general methods to check your loan eligibility. However, if you want to check the eligibility amount with specific lender, it is recommended to use the online personal loan eligibility calculator. Most of the banks have one on their website. 

3. Personal Loan Eligibility Calculator

The Personal Loan Eligibility Calculator is an instant tool to help you understand the maximum loan eligibility for your profile. It considers your income and repayment capacity to make the calculation. All you need to feed in is your age, net monthly income and expenses. It will instantly assess the loan eligibility for you.

You can also fill MyMoneyMaantra personal loan eligibility calculator to assess your loan eligibility. By filling up a single form you will get access to top offers available in the market. You can compare and choose the best match. A loan officer will guide and assist you at each step of your loan journey.

4. Internet Banking

You can also check available preapproved offers in your internet banking dashboard. Most lenders offer max loan offers and preapproved deals right in the mail box or internet banking dashboard of their customers. It is always faster & seamless to process a loan application with the bank you have a Salary Account or Savings Account with.

Final Words

Using the above points you can now calculate the max amount you can avail of from your bank. However, it is recommended to ensure that you do not borrow only based on the amount available to you. A loan is a debt and should always be planned. Opt for the required amount only. This will help to keep the monthly burden of EMIs low and will also help you repay it on time, thereby supporting your credit rating.