| Lender | Likely Rate | Max Amount | Verdict |
|---|
How is personal loan eligibility calculated?
Banks use a simple formula: your maximum EMI is 40 to 50% of your net monthly salary, minus whatever you're already paying in EMIs on existing loans. The remaining EMI capacity determines how large a loan you can repay within your chosen tenure at the expected interest rate.
Your CIBIL score affects two things — whether you get approved at all, and what interest rate you're offered. A higher score means a lower rate, which means the same EMI capacity can support a larger loan amount.
Eligibility by CIBIL score
| CIBIL Score | Approval Chance | Typical Rate | Notes |
|---|---|---|---|
| 750 and above | High | 10.5% – 13% | Best rates, highest amounts |
| 720 – 749 | Good | 13% – 16% | Competitive rates, worth negotiating |
| 700 – 719 | Moderate | 15% – 19% | Approved but at higher rate |
| 650 – 699 | Low at banks | 18% – 26% | NBFCs more likely, higher cost |
| Below 650 | Very low | 24% – 48% | Fintech apps only, very expensive |
How to increase your loan eligibility
Improve your CIBIL score. Going from 700 to 750 can increase your eligible loan amount by reducing the interest rate — the same EMI capacity supports a larger loan at a lower rate.
Close existing loans before applying. Every rupee of existing EMI reduces your EMI capacity. Closing a small existing loan or credit card EMI before applying can meaningfully increase your eligible amount.
Add a co-applicant. A salaried co-applicant — spouse, parent, sibling — adds their income to the calculation. Banks assess combined income, which increases both the eligible amount and can improve the rate offered.
Choose a longer tenure. A 5-year tenure has a lower EMI than a 3-year tenure for the same loan amount. This means the same EMI capacity can support a higher loan. The trade-off is more total interest paid.