Lenders usually use Multiplier Method and EMI/NMI ratio or a combination of these two methods to calculate your personal loan amount eligibility.
Multiplier Method
Lenders multiply your net monthly income by a set number (usually between 10 to 24) to calculate personal loan eligibility.
For instance, if your salary is Rs. 40,000 and the lender uses a 15x multiplier, you can get personal loan of up to Rs. 6 Lakh.
EMI/NMI Ratio
This method evaluates what percentage of your income goes towards EMIs. Most lenders prefer an EMI/NMI ratio of under 50–60%.
If you’re already repaying loans, the new loan amount will be adjusted to keep the EMI/NMI ratio within limits.
For high income applicants, lenders often relax these limits owing to a higher disposable income in hand.
