Personal Loan for Salaried Employees

Most private sector lenders offer personal loans to salaried individuals starting from 9.98% p.a. However, some public sector banks may offer lower interest rates on their personal loan schemes to salaried applicants.

Salaried individuals can apply for personal loans either by visiting their bank/NBFC branch(es) or by using their net banking or mobile banking platforms. However, making direct loan applications with multiple lenders significantly reduces their credit scores and thereby, their chances of availing the loan. To avoid this, it’s advisable to use online financial marketplaces like Paisabazaar, which allows users to compare personal loan offers from multiple partner lenders without adversely affecting their credit scores.

Personal loan interest rates for salaried individuals are usually lower than those offered to self-employed individuals as the higher income certainty of the former reduces the credit risk for the lenders, which then allows them to offer lower interest rates. However, the final interest rates offered to salaried applicants vis-à-vis self-employed individuals will depend on their credit profile and credit risk policies of the lender.

Salaried individuals applying for pre-approved personal loans can get the loan disbursed within minutes of making the loan application. Those applying for regular personal loan schemes may take a bit longer, with a turnaround time of 2-7 days for disbursement.

Salaried individuals can avail personal loans of up to Rs 40 lakh or even more in select cases, depending on their repayment capacity and the lender’s discretion. When determining personal loan amounts for salaried applicants, lenders use either the Multiplier Method, wherein the loan amount can go up to 10-24 times of the applicant’s monthly income, or the EMI/NMI Ratio, in which total EMIs of the applicant, including that of the proposed loan, cannot exceed the 50-55% mark of their monthly income. Some lenders may even use the combination of both to determine the eligible loan amount.