Many people prefer to get a personal loan to get financial help instead of asking for money from their friends and relatives. But do you know how does a bank decide the amount of personal loan to the customers that have to be sanctioned? First of all, the bank checks your eligibility after that if you are eligible than the bank gives you a loan easily. A personal loan is easily accessible.
What is a Personal Loan?
A Personal Loan is an unsecured loan provided by the banking and non-banking financial organizations to the customers to fulfill their personal needs. A personal loan can be used for wedding purposes, for business purposes, for educational purposes, for paying medical bills, or any other personal need.
Eligibility for Amount of Personal Loan to the Customers:
Before providing you a personal loan bank puts some checks on you. They check whether you are eligible to pay back the loan to the bank or not. After that, if you are eligible then the bank decides the amount of loan according to your income. Here some eligibility criteria are given
- First of all your age should be more than 21 years.
- After that, if you’re salaried your salary should be more than Rs. 20000 at least.
- If you’re self-employed then you should be paying ITR of 2.5 Lakhs from at least the last 3 years.
- Your credit history should be good. It means you should have a good credit score.
Amount of Loan:
The amount of loans that banks provide is not the same for everyone. It depends on your income. Basically, the bank provides you a loan according to your salary. However, the method of deciding the number of loans may vary slightly from bank to bank but still is quite similar. Let us discuss it for both salaried and self-employed persons.
For Salaried Applicant:
If you are salaried and you are applying for a personal loan then the bank will provide you amount maximum of 20 times your monthly income. It means banks generally put a multiplier of 20 on your monthly salary. For example, if your salary is Rs. 20,000 then he will get a loan of Rs. I0 Lakhs maximum.
For Self-Employed Applicant:
For self-employed applicants, there is a criterion of the multiplier of 4 on the ITR. For example, if a person files an ITR of 3 Lakhs per year then he will get a loan amount of Rs. 12 Lakhs maximum.
So these are the basic ways adopted by the banks to decide the amount of personal loan to the customers that have to be sanctioned.
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