Minimum Salary for a Personal Loan

Posted on Thursday, October 24th, 2024 | By IndusInd Bank

If you face an unexpected financial crunch, a personal loan can help you tide things over. Personal loans are versatile, easy to apply for, and are usually disbursed quickly. However, before applying for a personal loan, you must understand the eligibility criteria, including the minimum salary requirements. You can apply for and receive the loan amount only if you meet the personal loan requirements set by the bank. 

IndusInd Bank offers a quick application process, which includes easy eligibility criteria and reasonable minimum salary requirements. Let’s learn more about the same.

What is the Minimum Salary for a Personal Loan?

• The minimum salary for a personal loan varies across different banks and financial institutions. 

• In most cases, the bank will require a monthly salary ranging from ₹15,000 to ₹30,000. However, this also depends on factors like the loan amount, tenure, and the applicant’s creditworthiness. 

• For salaried employees, the minimum salary for a personal loan may be lower. This is because their income is more stable and predictable.

• The personal loan rules can differ for self-employed individuals and professionals. These applicants may need to show a higher minimum income because of the variable nature of their earnings. In most cases, banks may require a minimum annual income of ₹4-5 lakhs. 

• Self-employed individuals may also need to provide other documents, such as income tax returns. This helps demonstrate the applicant’s income stability and repayment capacity.

Also Read: Navigating Personal Loans for Self-Employed Individuals- Key Considerations

Other Eligibility Criteria for a Personal Loan

Banks also have several other personal loan requirements that you must meet to apply:

Age

The lower age limit for most applicants is 21-25 years of age. The loan applicant’s age should not exceed 60-65 years of age when the loan matures. 

Employment Status

Salaried individuals should be working with a reputable organisation for a minimum period, which may range from 1 to 2 years. Self-employed individuals should have a post-qualification experience of at least 4-5 years.

Credit Score

One of the major factor affecting personal loan rules is the applicant’s credit score. A good credit score is important for approval as it reflects the applicant’s creditworthiness. It will also help you in getting lower interest rates. 

Residing Address

If you live on rent, the bank will also check how long you have been staying at your current residence. 

Existing Debts

Some banks also assess your existing debts. This helps them ensure you have sufficient income to cover the new loan’s EMI along with your current obligations.

How Does Your Salary and Other Eligibility Criteria Affect Your Loan Application?

• Your salary plays a significant role in determining the loan amount you can borrow, the interest rate, and the loan tenure. 

• Higher salaries often translate to higher loan amounts and more favourable terms. Banks use your income to calculate your debt-to-income ratio. This helps them assess your ability to repay the loan without financial strain.

• Let’s assume you earn ₹50,000 per month and have no other significant debts. So, you may qualify for a higher loan amount with a longer repayment period. If your salary is at the lower end of the spectrum, you may be offered a smaller loan amount with a shorter tenure and higher interest rates.

Impact of Other Factors on Loan Application

• In addition to the minimum salary for a personal loan, your credit score is another critical factor. A higher credit score indicates responsible financial behaviour, which makes you a less risky borrower. This can lead to lower interest rates and more attractive loan terms. A low credit score may limit your loan options or result in higher costs.

• Other personal loan requirements, such as employment stability and existing debts, also play a crucial role. 

• Banks prefer applicants with stable employment. A stable job indicates a steady income source. If you have multiple ongoing loans, your debt-to-income ratio may increase. This makes lenders hesitant to approve a new loan. Hence, you must maintain a healthy balance between your income and expenses to improve your loan eligibility.

Conclusion

Knowing the minimum salary for personal loans and other eligibility criteria is essential. While salary is a significant factor, your credit score, employment stability, and existing debts also play critical roles. By meeting the requirements set by lenders, you can increase your chances of securing a loan at favourable terms. 

If you are ready to apply for a personal loan, start exploring IndusInd Bank’s Personal Loan offerings today. We have simplified eligibility criteria and an instant application and disbursal process so that you get the funds you need right away! 

Apply now for an Instant Personal Loan with IndusInd Bank!

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.