Understanding Personal Loan Borrowing Limits in India
The maximum amount you can borrow via a personal loan in India generally depends on several key factors, including your credit score, income, and the policies of your lender. Typically, this amount can vary from 50,000 to 4 million INR. However, some lenders may offer higher amounts, contingent on the individual borrower’s profile.
Factors Influencing Your Borrowing Limit
Your borrowing limit is influenced by a range of factors, which include:
Multiplier Method
A commonly used method is the multiplier method, where lenders calculate your loan limit by multiplying your net monthly income by a certain factor that typically ranges from 9 to 18. This factor is further adjusted based on your credit history and the reputation of the employer.
For example, if your monthly salary is 50,000 INR and the basic multiplier is 18, your maximum personal loan limit would amount to 900,000 INR.
Loan Repayment Capacity
Banks and non-banking financial companies (NBFCs) usually offer personal loans ranging from 10,000 to 40 lakh (4 million INR). However, your eligibility primarily depends on your loan repayment capacity, which considers your income and expenses.
Remember, it's essential to take a loan amount that aligns with your financial situation and repayment capability. Responsible borrowing is key.
Minimum Income Requirement
The minimum required income for a personal loan varies by bank. Most banks require a minimum net monthly income of at least 20,000 INR. However, in cities like Mumbai and Delhi, the minimum income limit is set at 25,000 INR.
Personal Loan Terms with Axis Bank
When applying for a personal loan from Axis Bank in India, you should be at least 21 years old at the time of application and 60 years upon maturity. You also need a minimum net monthly income of Rs. 15,000 to be eligible for a loan tenure of 12 to 60 months. Only salaried employees, those working in public sector undertakings, and salaried doctors are eligible to apply for this loan.
If you meet these eligibility criteria, your minimum and maximum loan amounts would be Rs. 50,000 and Rs. 5 lakhs (500,000 INR) respectively. When I applied for a personal loan, the bank assessed my eligibility, verified my documentation, and checked my repayment capacity. They approved my loan request and disbursed 2 lakh INR to my bank account. This sum was enough to purchase a two-wheeler of my choice and enjoy a free ride on Indian roads.
When considering a personal loan, it's important to thoroughly research and understand the terms, conditions, and eligibility criteria offered by different financial institutions. Consulting with a financial advisor can also provide valuable insights and guidance to ensure you make the most informed decision possible.