When applying for a personal loan in India, your monthly salary plays a significant role in determining your loan eligibility. If your salary is above ₹30,000, banks and NBFCs follow a specific set of rules to assess how much loan amount you qualify for.
In this blog by Shivafinz, let’s break down how banks actually calculate your loan eligibility and the key parameters involved.
1. Employer Category Matters
One of the first things a bank or financial institution checks is which company you are working for. Based on the organization’s size, stability, and reputation, companies are categorized into tiers:
- Category A: Government & top-rated private sector companies
- Category B: Mid-size and reputed private companies
- Category C: Startups or smaller firms with less credit history
👉 Borrowers from Category A companies are seen as more stable and often get faster approval and better loan terms.
2. The FOIR Norm (Fixed Obligation to Income Ratio)
The second major factor is the FOIR – Fixed Obligation to Income Ratio. This ratio helps banks assess how much of your monthly salary is already committed to existing EMIs and fixed obligations.
🧮 FOIR Formula:
FOIR (%) = (Total Monthly EMIs / Net Monthly Income) x 100
💡 Ideal FOIR Range:
- For most banks, FOIR should be between 50% to 75%
- If your salary is ₹30,000, then ideally, your total EMIs should not exceed ₹15,000 to ₹22,500
✅ A lower FOIR means you’re likely to get a higher loan amount with better interest rates.
3. Other Factors That Influence Loan Eligibility
Apart from salary and FOIR, lenders also look at:
- Credit Score (CIBIL) – Should ideally be 720+
- Age – Between 21 to 60 years
- Employment Type – Salaried or Self-Employed
- Job Stability – At least 6 months in the current job
Conclusion
If your monthly salary is above ₹30,000, you’re already in a decent position to apply for a personal loan. But remember, just having a salary is not enough. Banks look at a combination of your employer’s credibility, your existing EMIs, and your FOIR ratio to determine your loan eligibility.
Want to check your personal loan eligibility or get guidance on how to boost your CIBIL score?
💬 Comment “Eligibility” below or connect with Shivafinz today.