Personal loans are probably one of the easiest loans to get your hands on. They don’t need any intensive documentation and are more or less available to all. These loans have a higher interest charge on them, and hence it is always advisable to go for lenders or banks that offer minimum rates. Applying for a personal loan is pretty easy and the steps are quite legible, irrespective of what your background is but getting the same approved or sanctioned is a whole new deal.
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How income affects Personal loans
One of the key factors that determine the sanctioning of your personal loan is your income or salary and a decent credit score. Usually, higher-income re-instil faith of lenders in the borrower’s repayment capacity and almost draws down the probability of the latter defaulting on the loan. It also affects interest rate charges. One of the best things about personal loans is the fact that they don’t come with a fixed repayment tenure and the borrower is always free to choose a date that matches his convenience. Usually, most banks offer a time range of 90days to 3 years, and the borrower can choose any deadline in between to repay his loan.
Self-employed vs salaried individuals
Income receipts for self-employed individuals engaged in business or any financial service etc. are different from salaried employees who are perhaps working in some central or government office or anything of that kind. Interest rates charged are usually higher for them, maybe around 0.5%.
For salaried individuals working in some government institution, they would have to provide only their income statements, savings account balance and ITR returns. If you tick the boxes, you are eligible to apply for a loan. The interest rates are a bit lower than those for self-employed customers.
Reason for disparity
The main cause behind such disparity could be attributed to the fact that salaried individuals have a secure and guaranteed source of income; so in case of loan defaults or bad credits, the amount can be easily recovered. For self-employed individuals in business, the income receipts are more uncertain. Hence bad loans may or may not be easily recoverable.
How much personal loan is available for income bracket 30,000 to 50,000
The loan eligibility calculator takes into consideration your account balance, the interest rates offered by the bank, your current occupation, the loan tenure and then returns you the value of the total loan amount that you’d have to pay back.
- Usually, nationalised banks like SBI or Canara Bank offer a rate of interest ranging from 7% p.a. to 11.5 % p.a. for a period of one to three years, five years sometimes if your loan amount is high. Then this would make a loan amount somewhere between 93000 to 129,000 at a simple interest rate.
- Private companies or banks like ICICI bank charge higher, irrespective of your income bracket. Usually, they charge 12 to 15% p.a. for a period of one to three years. Other banks offering similar concessions include IndusInd, HDFC and Axis Bank.
- Then there are a few mutual fund and finance companies like Bajaj Finance; they offer similar rates as private banks but also cater to customers with a poor credit score or income statement.
- Additionally, all these banks or lenders prefix the EMIs on the loan to about 45 to 60% of your monthly income, in order to minimise the risk of defaults. So if you’re earning 30,000, then your monthly EMI should not exceed 15,000 or 18,000, which is pretty reasonable.
These are all the factors you need to be aware of if you have a salary of 30,000 and are looking to invest in personal loans. It is however always advisable that you carefully go through all the bank’s schemes and related documents before investing and choose the one that guarantees lower interest rates.