How Much Personal Loan Can I Get on 40000 Salary 1

How Much Personal Loan Can I Get on 40000 Salary

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A quick loan, also called a personal loan, is one that the bank approves after considering your income and expenses. It is an unsecured loan, and lenders do not ask for collateral or guarantee to approve these loans. So, they rely entirely on your income and credit score to analyze your repayment capability.

The typical range of personal loan amounts offered by banks and NBFCs is between Rs. 10,000 to Rs. 40 lahks. The amount of loan you will be eligible for will depend on your ability to repay the loan. If you want a small ticket loan, you can easily download the best loan app and apply for one. But if you want a big-ticket personal loan for home renovation, education, wedding, or medical emergencies, you can approach your bank or other lenders.

Personal Loan

How do lending institutes determine your loan amount eligibility?

Banks and NBFCs generally assess your repayment capability based on your monthly disposable income, which is further influenced by criteria like your monthly salary, your current loan repayment commitments (including those for the proposed loan), the payment of any co-applicants (if any), etc.

When determining your eligibility for a loan amount, lenders may also consider your EMI/NMI ratio and your steady income. Most lenders specify that your regular monthly income should be at least Rs. 20,000. Lenders use the Multiplier method and the Fixed Obligation Income Ratio to determine how much credit they can offer you that can be easily accommodated in your income.

The amount you are qualified for in the Fixed Obligation Income Ratio (FOIR) approach fluctuates by your debt obligations. Before determining the amount you qualify for, lenders look over your bank records and calculate your potential monthly expenses.

How much Personal Loan Amount Can I Afford With a 40000 Salary in India?

Before applying for a quick loan, you must know the right loan amount that you should use. If your monthly income is Rs. 40000, and considering you have no other ongoing debts, your EMI should not exceed 50 percent of this income. This means you can afford to pay a monthly income of Rs. 20000. But this differs from person to person.

The amount of loan that you should apply for depends on your monthly expenses and how much disposable income you have to accommodate an EMI. It also depends on your age and how many years of service are left to repay the loan.

Thus, depending on the loan tenure you want to opt for and the EMI that you can accommodate in your salary, you can determine the loan amount using a loan calculator on the best loan app.

Always remember that your loan EMI should not exceed 50% of your monthly income, which in this case is Rs. 20000. If you have pre-existing debt, including credit card bills, your total monthly obligation should not exceed 50% of your income. For example, if your credit card bill is Rs. 5000 every month, your loan EMI should not be more than Rs. 15000.

How do lenders Calculate the Amount of a Personal Loan?

When determining your eligibility for a personal loan, lenders typically utilize the multiplier technique, the EMI/NMI ratio, FOIR, or a combination of methods.

What is a Multiplier Method?

Many lenders employ the multiplier approach to determine the loan amount eligibility. The quick loan amount determined using this method is based on a specified multiple of the applicant’s net monthly income. Depending on the lender, the multiple might be anywhere from 10 to 24 times the applicant’s monthly salary. In addition to this, they also check your EMI/NMI ratio.

What is an EMI/NMI Ratio?

The EMI/NMI ratio is the percentage of your net monthly income (NMI) used to pay your current EMIs and new loans. Lenders often favor approving personal loans for applicants with EMI/NMI ratios of up to 50–55%.

The tenure, interest rate, and net monthly income influence your EMI/NMI ratio. You can extend the loan term or take out a loan at a lower interest rate to enhance the eligibility for a greater personal loan. However, you cannot change your net monthly income or fixed obligations.

What Are Fixed Obligations to Income Ratio?

Financial institutions use the Fixed Obligations to Income Ratio (FOIR) metric to assess a borrower’s loan eligibility. The FOIR of a person is determined by adding up all of their fixed monthly obligations, except statutory deductions such as professional tax, investment deductions, and provident fund.

Although additional expenses like rent may also be regarded as fixed obligations based on a person’s income level, the FOIR measures an applicant’s available cash flow that can be used to pay off both old and new debts. As a result, a person’s FOIR significantly impacts the loan amount.


According to the multiplier technique, you are qualified for Rs. 13.50 lakhs for five years on a salary of Rs. 40,000. According to the Fixed Obligation Income Ratio approach, you qualify for 8.80 lakhs if your monthly EMIs are Rs. 3,000 or less.

If you have EMIs totaling roughly Rs. 5000, you will receive an amount of Rs. 8.40 lakhs; if you have EMIs totaling Rs. 8000, you will receive an amount of Rs. 7.68 lakhs. You are qualified for a loan of Rs. 7.28 lakhs if your EMIs total Rs. 10,000.

What Is The Eligibility Criteria To Apply To the Best Loan App?

While a bank considers several factors before accepting a personal loan application, and different lenders have varying eligibility requirements. However, the most important factor any lender considers is your capacity to repay the loan. The best loan app also checks the same.

Applying for a quick loan through a loan appplyingy for a quick loan through a loaIf you have a monthly salary of Rs. 40,000, have no pre-existing debts, and have maintained a healthy credit score, then you can easily avail of a loan of up to Rs. 1.5 lakh through the best loan app. Aingis quite simple, fast, and convenient.

Just download the loan app. Register by providing your contact information (name, phone number, address, and bank information). The next step is to input the loan details, including the amount and term of the loan.

The loan app requires you to upload your documentation online. The app will assess your credit profile and verify your documents. Once you satisfy their eligibility rules, the loan amount will be credited into your account within 24 to 48 hours.


Your monthly or fixed monthly income is the most significant factor in determining your loan amount eligibility. But other factors, such as the debt-to-income ratio, credit score, the number of dependents, job experience, and the years of service left, are also considered while calculating the loan amount.

Most lenders offer personal loans up to 10 times the average monthly wage, and some even go as high as 20 times the average monthly pay. However, it is determined by the internal policies of the specific lender. But even if you are eligible for a high loan amount, you must always apply for the amount you need.


I am a writer, financial consultant, husband, father, and avid surfer. I am also a long-time entrepreneur, investor, and trader. For almost two decades, I have worked in the financial sector, and now I focus on making money through investing in stock trading.