Personal Loan Eligibility Calculator

Personal loans offer quick financial solutions for various needs like medical emergencies, weddings, or debt consolidation. Assessing your eligibility ensures you can manage repayments comfortably. Use the Loanpao personal loan eligibility calculator to plan your financial journey.

Calculate Your Personal Loan Eligibility

What Is Personal Loan Eligibility?

Personal loan eligibility is determined by lenders based on your ability to repay the loan. Key factors include your income, age, income, credit, score, employment status, and existing financial obligations.

Failing to meet these criteria may lead to loan rejection, affecting your credit score. Ensure you meet the required criteria for a smoother application process.

How To Use Personal Loan Eligibility Calculator

To use the personal loan eligibility calculator, follow these steps:

  • Enter your monthly income and existing EMIs for other loans.
  • Specify the desired loan tenure (up to 7 years).
  • Input the interest rate offered by the lender.
  • The calculator will display your eligible loan amount and monthly EMI.

How Is Personal Loan Eligibility Calculated?

Eligibility is calculated based on monthly income, existing debts, loan tenure and interest rate. For example:

  • Monthly Salary: Rs4,000
  • Tenure: 5 years (60 months)
  • Interest Rate: 12%

Step 1: Calculate the maximum EMI you can afford

Since banks allow up to 50% of gross monthly income for loan EMI:

EMI = 40000 * (50/100) = 20000

So you can afford Rs.20,000 per month as EMI.

Step 2: Input values in Formula

The loan eligibility formula is:

P = EMI × [(1+r)^n - 1] / [r × (1+r)^n]

Where:

  • P = P Loan amount
  • EMI = Rs20,000
  • r = Monthly interest rate = 12% / 12 = 0.01
  • n = Loan tenure in months = 5 * 12 = 60 months

P = 20000 × [(1+0.01)^60 - 1] / [0.01 × (1+0.01)^60]

P ≈ Rs.8,99,428.59

Therefore, the eligible loan amount is approximately Rs.8,99,428.59.

Personal Loan eligibility Criteria

Criteria Details Age Limit 21 to 60 years Minimum Income Rs15,000 per month for salaried; Rs3 lac annually for self-employed Maximum loan Tenure 7 years Credit Score Preferably above 750 Employment Stable job or business with at least 1-2 years experience

Documents Required for Personal Loan eligibility

  • Completed Application: Fully filled-out personal loan application form.
  • Recent Photographs: Passport-sized photos.
  • ID Proof: Aadhar Card, PAN Card, Voters ID, Driving License, or Passport.
  • Address Proof: Utility bill, Aadhaar, or rental agreement.
  • Income Proof:
    • Salaried: Salary slips (3 months), bank statements (6 months), Form 16, ITR (2 years).
    • Self-Employed: ITRs (2 years), ITRs (6 months), bank statements (6 months), business financials.

Factors affecting Personal Loan Eligibility

Age

Younger applicants may get longer tenures, while those closer to 60 may face shorter repayment periods.

Income p

Higher and stable income increases eligibility for larger amounts.

Credit score

A CIBIL score above 750 enhances approval chances.

Employment status

Salaried individuals with 1-2 years of stable employment or self-employed with consistent business income are preferred.

Loan Amount

Choosing an amount aligned with income ensures manageable amounts.

Current financial commitments

High existing EMIs may reduce eligibility; paying off debts can help.

How to Improve your Personal Loan eligibility

Keep a healthy credit score

Maintain a score above 750 by paying bills and EMIs on time.

pPay off current Debt

Reduce your debt-to-income ratio by clearing existing loans or credit card balances.

Stable employment history

A Consistent job or business history assures lenders of repayment capacity.

pAvoid delayed payments

Timely payments improve your creditworthiness.

Frequently Asked Questions

Banks assess monthly income, age, credit score, and existing debts, limiting EMI to 50% of income after other obligations.

Typically up to 7 years, depending on the lender and applicant’s profile.

Maintain a high credit score, reduce existing debts, and ensure stable employment.