Personal Loan With ₹20000 Salary

Personal Loan with ₹20000 Salary

Personal Loan with ₹20000 Salary

Wondering, How much loan can I get on a ₹20,000 salary?  If you find yourself in this situation then a personal loan could be the solution for you. Personal loans are unsecured loans that can serve varied immediate financial needs.. Whether it’s for unexpected expenses, consolidating debts, or fulfilling personal aspirations, knowing your borrowing potential is crucial. This blog will guide you through various factors associated with availing a personal loan on annual income of 20000.

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How do Lenders Decide on Loan Amount for ₹20000 Salary?

When it comes to determining how much loan you can get on a ₹20,000 salary, banks and NBFCs use  the Multiplier Method or the EMI/NMI Ratio method. These  two main approaches are used to calculate loan eligibility by assessing income and financial situation. These methods help to decide on the loan amount that you can avail..

So, if you’re curious about How much loan can I get on a ₹20,000 salary?, understanding these calculation methods is essential.

  • Multiplier Method:The personal loan amount is determined using a specified multiple of the applicant’s net wage under the multiplier approach. Depending on the lender and monthly income, this multiple may be anywhere between 10 and 24 times the applicant’s gross pay.

To determine the loan amount, lenders use the following formula:

(Monthly salary x Set multiplier)

For example:

Your Income = ₹20,000
The set multiplier by the lender = 20
Therefore, the maximum loan amount you will be eligible for
 = ₹20,000 x 20 = ₹4,00,000
  • EMI/NMI Ratio:Lenders use the EMI/NMI Ratio approach to determine how much of a borrower’s net monthly income (NMI) is used to pay his loan EMIs, which includes the EMI for the proposed loan. Lenders often favor providing personal loans for candidates whose EMI/NMI ratios are between 50 and 55 percent. The formula to use this method of calculation is (EMI/NMI) x 100. Let’s take a look at an example below for you to have a clearer idea: 

For example:

Suppose the net monthly income = ₹20,000
Monthly EMI = ₹5000
EMI/NMI ratio = (5000 / 20,000) x 100
EMI/NMI ratio= 0.25 x 100
EMI/NMI ratio= 25%
Loan amount = (EMI/ EMI/NMI ratio) x 100
                      = (5000/0.25) x 100
                      = 5000 x 400
                      = ₹20,00,000
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How much Loan can I get on 20000 Salary in SBI ?

While applying for a loan, the State Bank of India might ask for information on your income, creditworthiness, and other financial obligations to understand your repayment capacity. But, you can avail personal loan for 20000 annual income  or lower than that with SBI since their minimum salary requirement to get a loan is ₹15000 for a maximum loan amount up to  ₹20 Lakhs.

Note- It’s best to directly contact the bank or visit their official website to get accurate and up-to-date information on their loan offerings based on your salary.

Also Read: Personal Loan For 40000 Salary

Personal Loan Eligibility For 20000 Salary

Personal Loan Eligibility For ₹20000 Salary

Before diving into the question: How much loan can I get on a ₹20,000 salary? Understanding the  loan specifics and concept of loan eligibility is necessary. Lenders consider various factors beyond your salary, including credit score, employment stability, existing debts, and monthly expenses. While salary is a significant factor, it alone may not determine your personal loan eligibility for 20000 salary:

Requirements Details
Age 21- 65 years
Employment Status Salaried, Self-employed
Work Experience  2-5 years
Monthly Income Minimum 15,000
Credit Score 650
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Documents Required for Low Salary Personal Loan

Obtaining a personal loan can be a helpful financial solution, especially with a low salary. However, lenders require specific documents to assess the borrower’s creditworthiness and determine their ability to repay the loan. Refer the table below to know the documents required for a low salary personal loan or personal loan for 20000 annual income:

Proof of identity PAN card, Aadhaar card,voter ID card.
Proof of address Utility bill, bank statement, or rental agreement
KYC documents This could include your PAN card, Aadhaar card, and voter ID car
Passport-size photographs  You will need to submit two or three passport-size photographs.

Interest Rates for Loan on 20000 Salary

Interest Rates for Loan on 20000 Salary

Interest rates for personal loan on an annual income of 20000 can indeed vary based on factors like the loan type, lender’s policies, credit score, and loan tenure. Loans with better credit score and stable employment receive lower interest rates, while riskier loans may have a  higher rate. Interest rates on loans for a salary of Rs. 20,000 generally start at 10.99% p.a. 

The table below provides the details on various interest rates provided by Banks and NBFCs for  20000 salary.

Loan From Lenders Interest Rates
SBI Loan 11.00%-15.00% p.a.
Axis Bank 10.49% p.a. onwards
Tata Capital 10.99% p.a. onwards
Money View 1.33% per month onwards
Stashfin 11.99%-59.99% p.a.
PaySense 1.4%-2.3% per month
KreditBee 12.25% p.a. onwards
Cashe 2.25% per month onwards
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How Can I be Eligible for Better Loan Amount with a salary of Rs 20000?

If you are planning to avail personal loan on ₹20000 salary, it requires strategic planning and financial considerations. While you are still asking yourself how much loan can i get on 20000 salary then you should also certainly make yourself well prepared for the same.  Follow the tips below to know how to be eligible for a better loan amount with a salary of 20000.

Good Credit History:

A strong credit history is crucial in determining loan eligibility. Pay your bills on time, manage credit cards responsibly, and avoid defaults or late payments. It is always suggested to  check your credit report for errors and raise dispute for  any inaccuracies.

Reduce Existing Debts:

Lenders consider your debt-to-income ratio when assessing loan applications. Lowering your existing debts can improve your chances of securing a better loan amount. Consider paying off high-interest debts or consolidating them to lower monthly payments.

Consider a Co-Signer or Joint Application:

If possible, you can include a co-signer with a higher income and good credit to strengthen your loan application. This can increase your chances of approval and potentially qualify you for a larger loan amount.

Choose the Right Loan Type:

Different types of loans have different eligibility criteria. For example, some government-backed loans might have more lenient requirements. Research and select the loan type that suits your financial situation best.

Compare  Lenders:

Compare loan offers from multiple lenders to find the one that  provides you with the best terms based on your salary and financial history.

Demonstrate Stability:

Lenders prefer borrowers with stable employment and residential history. If you have been with the same employer and residing at the same address for a considerable time, it can positively impact your loan application.

Remember, while these steps can enhance your eligibility, it’s essential to borrow responsibly and only take on debt that you can comfortably repay. Always read and understand the terms and conditions of any loan offer before accepting it.


Before applying for a loan, consider evaluating your financial situation, budget, and long-term goals.Availing personal loan on ₹20000 salary can be a little daunting, however following the tips and information  provided in the blog should answer your query on How much loan can i get on 20,000 salary.  Responsible and prudent financial planning is always necessary to maintain a healthy financial life.

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