how much personal loan can i get

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how much personal loan can i get

How Much Personal Loan Can I Get?

How much personal loan can you get?

Banks provide personal loans based on the income of the individual. Banks normally provide the loan that is up to 2 – 3 times the annual income of the borrower. Apart from income, other factors that decide the maximum eligible amount are the borrower’s past track record, other existing loans and so on.

Click here to find out your loan eligibility if you are self-employed.

Click here to find out your loan eligibility if you are salaried.

If you are already servicing a loan through monthly installments (EMIs), the bank will exclude your annual EMI payment on that loan while calculating your income. For example, if you have post tax annual income of Rs 5 lakh and you have been paying an EMI of Rs 10,000 every month, then the bank would consider your income as Rs 3.8 lakh (Rs 500,000 – Rs 120,000).

The maximum personal loan that many banks give is Rs 10 lakh, even if your income makes you eligible for more.

Suppose your income is not sufficient to get the loan amount that you want, you could club the income of your spouse or relatives along with yours to get a higher loan amount.

How Much Personal Loan Can I Get On My Salary?

Compared to most other loans, Personal Loans are easier to get. The lender may be a bank or a non-banking finance company (NBFC). In either case, it will extend Personal Loans to customers if they fulfil certain basic criteria. Some of these criteria are a decent income and a good CIBIL score.

The lender usually charges a higher rate of interest as Personal Loans are unsecured loans. The rate of interest may vary from 11.59% to 32% from lender to lender. That means the rate charged by ICICI Bank may be different from the interest rates of Bajaj Finserv.

How much Personal Loan you can get will mostly depend on your monthly income. The lender applies one thumb rule while processing the loan:

It ensures that the customer has enough money in hand to repay the equated monthly installments (EMI).

The rule is simple enough. The lender will see if the EMI is below 50% of your take-home income. It will check whether you have taken any other loan. For example, suppose your take-home income is Rs 20,000 per month. The bank will never extend a loan where the EMI comes to Rs 10,000 or more. This will hold even if you are not paying any EMI for other loans.

Also Read : When, How and Why A Personal Loan Can be a Financial Lifesaver?

What if my salary is between Rs 20,000 and Rs 30,000?

How much Personal Loan can I get on my salary?

Again, there is no particular formula for calculating your loan entitlement. The lender will check that you have not defaulted on earlier loans. Here, your CIBIL score will be the proof. It will also consider whether you are repaying any other loan at present.

If your take-home pay is Rs 25,000, the EMI on the loan will not exceed Rs 12,500. How much you can borrow is at the discretion of the lender. Banks and NBFCs can extend a Personal Loan of a maximum of Rs 25 lakh to individuals.

  • Approach the lender directly. This will give you a fair idea of what loan amount you will be entitled to.
  • There is no formula to calculate the loan you will get.
  • Procure your CIBIL score before approaching the lender. A score in excess of 700 is generally acceptable.
  • If your salary is below Rs 30,000, you could look at a gold loan instead. The interest rate is lower in a gold loan. Besides, foreclosure does not attract any penalty.

Are you eligible? Use a Personal Loan eligibility calculator based on salary

Personal Loans are extended to both salaried and self-employed individuals. Here is a quick look at the eligibility parameters.

Discover How Much You Can Borrow:

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Your Guide to Getting a Personal Loan in Singapore

This guide serves to detail and collate some frequently asked questions by our site's visitors about legal unsecured personal loans in Singapore. It is very much a work in progress and feedback is appreciated.

Table of Contents

Where Do You Use a Personal Loan?

A personal loan can be used for any expenses. The two types of these loans that are available are unsecured and secured. The unsecured personal loan in Singapore does not require collateral and you can get an amount from $500 to $100,000. If you want to borrow a larger amount, companies will instead offer you a secured loan requiring you a car, house or property as collateral.

Should I Get a Massive Personal Loan?

It is possible to borrow money in Singapore from banks to consolidate a credit card debt because they have much lower interest rates. This is known as a debt consolidation.

Personal loans can also be used for home repair, child's education, unexpected expense or anything you need funds for. Although you can also use it for a dream wedding or a luxury vacation, it's best to save up for these events rather than borrow money for it. As always, do think carefully before getting any personal loan.

How Do I Know Personal Loan is My Best Option?

Borrowing money is one of your many options if you need personal loan assistance. Before you consider borrowing, do your homework. Ask yourself, “Should I take a personal loan?”. Review your options and decide which works best for you. Look for the easiest personal loan approval process. Find out, how many personal loans can you have at once without compromising your credit score. It is important to understand the fees and charges as well as the repayment conditions.

If you need the money and this is a favorable option for you, do think through your repayment plan. Banks and companies have a loan calculator on their websites that you can use that can help you make up your decision. Look for personal loan terms with early repayment options. Please do consider carefully and do not borrow on impulse.

Who Provides Protected Personal Loans in Singapore?

It is best to get personal loans from finance companies and banks because they can lend money to people with good credit scores. Although the banks will require a higher income from borrowers, the licensed lending companies are more lenient with their income brackets as long as you meet all their personal loan requirements. Above all, check out and choose a reputable and finance company for your security and peace of mind.

Ensure that any licensed personal loan lenders are legal and registered either with the Monetary Authority of Singapore (MAS) or the Ministry of Law (Minlaw).

Who Can Get a Legal Personal Loan?

Anyone who meets the eligibility requirements of the bank, lending agency or licensed lender can apply. The borrower should have a stable job, and age between 18 to 65 with proof of income. This is usually specified on the finance company's website. If the borrower falls within the eligibility requirements, he/she will be able to apply.

Some banks also provide credit cards for low income foreigners in Singapore. Please note that all applications are subject to the approval of the lender and bank, and in general, banks have higher requirements for you to qualify for the foreigner loan.

Where Do I Find Good Personal Loan Terms?

The question now is, “Where can I borrow money in Singapore and where do I find good terms?”. In Singapore, you can borrow money from banks and licensed lenders. You can apply in person at the bank or licensed lender. For many lenders, you have the option of doing the initial application on the company's websites, followed by the submission of all your requirements at their office for approval. Some large banks may offer loans over the phone. Keep in my mind to know the required documents for your application to make the process faster.

Please note that whichever medium you use to apply and get approval, there should be a clear contract detailing the terms of the loan. If your application does not require an official contract in the lender's or bank’s, name, this is a sure sign that this is an illegal moneylender/loan shark. Personal loan time approval takes time.

Some banks do treat your recording over the phone or submission over the internet as a contractual agreement. When in doubt, please do check with your legal representative or other official sources for the most accurate information.

How is Personal Loan Eligibility Calculated?

Large personal loans by banks are usually offered to Singapore citizens and permanent residents. Licensed lenders will often lend to anyone with a full-time job in Singapore, including foreigners on any type of work pass. You also might ask, “how much unsecured personal loan can I borrow?”. Remember that the best loan requirements are your credit rating, work pass, employment certificate and other proof of income.

In general for licensed lenders, if you borrow from a licensed lender, your can typically borrow up to four times your monthly salary, if you make more than $30,000 a year. If you make between $20,000 to $30,000 a year, you can borrow up to two times your monthly salary. If you make above $120,000 a year, you can borrow any amount.

How Much of Personal Loan Can I Qualify For?

If you borrow from a bank and make $20,000 a year or more, you can usually qualify for a loan for up to 4 times your monthly salary. Or up to 10X your monthly salary if you make $120,000 a year or more.

For both banks and licensed lenders, these rules may vary depending on your credit rating, outstanding debts and other factors.

How Much Can I Borrow for a Personal Loan?

The amount you can borrow depends on your income and salary as mentioned above. The easiest personal loan to get approved for is the secured loan which means that you will provide a collateral in exchange for your loan. The amount of your loan may also vary depending on the collateral.

Which Personal Loan is Easiest to Get?

Banks and institutions usually consider two things in approving loan applications. First is the amount you want to borrow and the second is your personal credit rating. The finance company will analyze your capability to pay by reviewing your credit rating and income. Once you submitted the required documents and showed your excellent credit rating, you're on your way to fast approval. Please note that it is not easy to get a personal loan quickly if you have incomplete requirements and getting a personal loan from financial institutions needs a record of credibility.

What is the Reason Why My Credit Application is Denied?

There are several possible reasons why your application was not approved. The most common reason is due to bad credit history or lack of it because the bank will gauge your ability to pay based on your credit reputation. Your salary may also have fallen short of the bank requirements. The other reason might be because you have too many loans.

The banks will also consider that your repayments should not exceed 60% of your net salary. The good thing is banks have different ways of measuring creditworthiness of a borrower. So you if you've been declined by one bank, it necessarily mean you'll be rejected by others as well. Do check to ensure you completed all forms and submitted all the mandatory documents.

If you do not qualify for a loan from a bank, sometimes licensed lenders may still be able to offer you a loan. Getting a personal loan with bad credit is not impossible. However, this is also subject to approval, and your credit rating will be reviewed to ensure that you can pay the money back.

What Are the Banks that Offer Personal Loans?

Almost all banks offer personal loans with information made available on their website. Some of them also have promotions. If you're not approved by the bank, you can also go to private licensed credit institutions. Take note that there are few banks that offer personal loans with bad credit standing. The thing is to do a lot of research and comparison. Consider the eligibility requirements, interest rates, repayment details and other terms and conditions.

What is the Interest Rate of Personal Loans?

Interest rates differ between banks and institutions. You may call the banks or visit the websites of the various agencies to find out more. Ask about the fine print involved in the personal loan application.

Also, find out if the interest rates are fixed or variable. A fixed rate, which is mostly offered by banks will remain constant throughout the loan period. A variable rate varies according to general annual percentage rate fluctuations. The risk of a variable interest rate is that it may seem low at first but can double or triple later.

Personal loan rates are interest rates applied to your overdue or late payment to the lending institution. It is factored into the amount and tenure of the loan, credit report assessment, and the current market rate. For banks, personal loan rates normally range from 4% - 10% and are calculated on an annual basis. Interest rates change from time to time and from different institutions because licensed lenders and banks do not offer the same interest rate.

If you borrow from a licensed lender, by law, your interest rate cannot exceed 4% a month. Be sure to look for the best interest rate in Singapore to save money.

When Do I Need to Get a Personal Loan?

Maybe you want to buy the laptop or furniture you've been eyeing for months, you can get a personal loan any time but set aside enough time to do your research. It will be beneficial for you if you look for the lowest personal loan rate in Singapore. Note that banks approval process will take some time. Learn how to borrow money from banks and be sure to complete all the mandatory documents to ensure a faster transaction and response time.

As always, make sure that you have a plan to repay the money back before taking a personal loan. If not, you might find yourself knee deep in debt.

Is it Smart to Refinance My Personal Loan?

Refinancing your personal loan can help you to save money if you have done your research. Take time to understand everything involved. You may choose to refinance your personal loan if you find a new term with reduced fees or has the lowest interest rate.

Consider the ongoing fees, repayment fees, loan establishment costs and other terms of the new loan. Take all aspects of both loans into consideration. You may want to use a repayment calculator to compare your options.

When to Refinance a Personal Loan?

You may consider refinancing your personal loan if the interest rates drop and if the calculations tell you that you can save some money in the long term.

Use a loan repayment calculator to determine the amount of money you might save. It will need your existing credit information and refinancing option. This is to determine the total cost of each loan. This information is then used to calculate any potential savings.

Where to Refinance Personal Loan?

Depending on the agency or institution, you may be able to apply for a new loan online. If you used the same institution for the refinancing, they would use funds from the new contract to close the original loan. If a different institution is used, they will wire the funds to the original institution to close the loan. Note that you need to do your research to know where to borrow money with low interest rates.

Are Personal Loans Considered Bad?

Personal loans are a great option if borrowers don't live beyond their means. You can get a personal loan to payoff your credit cards or debts . It will also give you the extra cash you need on things you want to spend on. Meanwhile, getting a personal loan will be an awful idea if you spend more than you can afford, resulting you falling into a debt trap.

Make sure that your income plus the loan installment is sufficient to sustain your needs. But as long as you are sure that you have the ability to pay it back promptly, personal loans can be a flexible financial option for you.

Are Personal Loans Good for Your Credit?

Your credit score is based on three factors. The first is your payment history. The second and third is the total amount of debt you owe and the number of credit lines you have opened recently. Taking a new personal loan will increase your total debt and open a new credit line.

While this could lower your credit score, credit agencies take into consideration your overall credit history. If you have a history of managing debt and making timely payments, the new loan is likely to have less effect on your credit score. To prevent a personal loan from negatively affecting your credit score, continue to make payments on time and pay off the debt within the terms of the agreement.

How to Secure a Personal Loan With Mediocre Credit?

Having poor credit can be a big obstacle in getting a loan from a traditional big bank with standard personal loan guidelines. However, you may want to consider other options like licensed lenders.

The loan amount could depend on both your credit score and whether the loan is secured. A secured loan is one that is backed with collateral that the one lending the money can seize if you cannot repay the loan. Ensure you pay back your loan on time, or you might lose the collateral you’ve agreed to use.

What is The Purpose of a Personal Loan Insurance?

Personal loan insurance is a form of insurance that ensures that your repayments are taken care of in unfortunate instances. Loans are often a long-term commitment. Getting a personal loan insurance can help you ensure that your debt does not get out of control if something unfortunate happens like death, disability or involuntary unemployment. Like all insurance, a personal loan insurance is subjected to exclusions, limits and conditions.

Typically personal loan insurance is only available from a bank. Do check with your bank for more details.

How does Personal Loan Payment Calculator Work?

Different institutions would have a different personal loan calculator offered for you to use. A personal loan calculator helps you to estimate the monthly personal loan repayment amount. Most calculators would require you to enter the loan amount, term, and interest rate. If you are using a personal loan payment calculator from a bank, the interest rate would be pre-populated for you.

How are Personal Loans Calculated?

It can be calculated using a personal loan calculator. It will calculate the Effective Interest Rate (EIR) and the amount that is payable per month for a specified period.

The amount payable per month depends on three things, the loan amount, the interest rate that the bank charges for your personal loan and the duration of your personal loan. To adjust the equated monthly installment, change the personal loan amount or the specified loan period. Keep in my mind to not get a personal loan that is beyond your ability to repay every month.

Personal Loan Repayment in Singapore

The borrower has to make a monthly repayment of a fixed personal loan. For flexible personal loans, the borrower has to repay at least the minimum payment that is stated in the offer letter. A late payment penalty will be charged if payment is not made within the predetermined time frame. The penalty amount may vary for different banks. You will also expect charges like processing and insurance fees for certain loans.

Do read the fine print before taking up any loan or signing any contract.

How Much Personal Loan Can I Get?

Planning to apply for a personal loan? Wondering how much you would be eligible to apply for?

It’s best to know the maximum loan amount you can secure before you make a big financial commitment. We shed light on the regulations that govern your personal loan eligibility and the things you must do before submitting your loan application.

Maximum loan amount: What does the regulation say?

According to UAE Central Bank regulations, banks cannot offer a personal loan in excess of 20 times an individual’s monthly salary. So, if you earn AED 10,000 a month, the maximum personal loan you would qualify for is AED 200,000.

But that’s not all. The maximum personal loan amount you can apply for is also subject to your Debt Burden Ratio (DBR). The UAE Central Bank has mandated that a UAE resident cannot have a DBR of more than 50 percent. What that means is the combined monthly installments on your existing loans should not exceed 50 percent of your monthly income. So, if you earn an income of AED 10,000 a month, you must not be repaying more than AED 5,000 towards monthly debt installments.

Before you apply for a personal loan…

Before you head to the banks, we suggest doing a bit of homework, so you know exactly how much personal loan you can and should apply for.

The first step is to check your DBR. Wondering how to calculate it? It’s pretty straightforward. Make a note of all your existing monthly loan installments. If you have one or more credit cards, take into account 5 percent of the combined credit limit on all the cards. Add these amounts up and divide by your monthly income, to arrive at your DBR percentage.

Don’t want to do the math? Souqalmal.com can calculate your DBR for you. Check your DBR Here.

With the launch of credit reporting in the UAE, banks can easily check your debt history – How much do you already owe? Have you missed any repayments? And much more…

If you have an existing loan and credit card or have repaid a loan or credit card in the past, it would be best to check your credit report before you apply for another loan. Go through your report to see if all your old repayments have been correctly updated. If the report is missing something, you could end up being offered a higher-than-average interest rate and a lower personal loan amount than what you ideally qualify for.

Opt for the ‘salary-transfer’ variant

Most banks in the UAE offer two variants of personal loans – One, where the applicant must transfer his or her salary to the lending bank, and the other, where there’s no salary transfer requirement.

If you go with the salary-transfer option, you would not only be able to get a much lower interest rate, but will possibly be able to secure the maximum loan amount offered by the bank.

Consider getting a co-applicant

Some banks offer you the option of applying for a loan with a co-applicant. This can increase your loan eligibility, by taking into account the income of your co-applicant as well.

The co-applicant could be your spouse or close family member. And this personal loan option is a good one if you have a low income, a less-than-great credit score or existing debts that have lowered your borrowing capacity.

How Big of a Personal Loan Can I Get — and Afford?

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When it comes to getting a loan for things like a car or home, the guidelines on what’s affordable to borrow are relatively clear.

But for unsecured personal loans, the situation is often murkier. That’s because it’s harder to figure out how much of a personal loan you can really afford.

A good first step is to look at your financial situation. However, there are some others questions you might need to consider before you can fully answer that.

Here’s what you need to figure out to keep your personal loan affordable.

One way to figure out how much you can afford to borrow is to apply for a personal loan.

After all, it’s in the lender’s best interest to limit your loan to what is affordable. This limits the lender’s risk of losing money.

“From the lender’s view, your application should show your ability to comfortably make the monthly payment—whether that’s $250 or $750 per month,” says Michael Foley, Credit Officer, Personal Loans for online lender Earnest.

Shop smarter with personalized loan rates from multiple banks

“The lender wants to ensure you’ll be able to make your payments in a timely fashion and that you will still have a cushion in your budget so you can weather other unforeseen expenses or additional debt,” adds Foley.

That’s where the loan approval and verification process comes into play.

A lender verifies and weighs various factors before approving your loan request. These factors include your income, other debts you hold or are repaying, and other monthly expenses.

The lender then uses that information to determine what would be an affordable loan principal for your finances.

Keep in mind, however, that “what you might consider ‘affordable’ might be slightly different than the lender’s definition,” Foley explains.

Essentially, it’s possible you could be approved for a much higher loan than you’ve perhaps budgeted for.

How much can I afford to pay each month?

At the end of the day, this a question only you can answer. A big factor to consider is your own disposable income and money management skills.

Your disposable income is the portion of your take-home pay that is left over after you cover all necessary living expenses. Or, as lenders call it, your “monthly free cash flow after taxes and other fixed obligations,” Foley says.

Ultimately, you decide how much of your disposable income you can devote to repaying a personal loan. For some people that could be as much as half. For others, it could be much less.

Once you’ve come up with the dollar amount you would be willing to pay each month, you can plug that monthly payment into a calculator. This can tell you how much of a principal you could get based on your desired monthly payment, repayment period, and interest rate.

How much you earn each month will directly affect how big of a personal loan you can afford or be approved for. After all, you can only repay your debts with the money you earn.

“A typical approved applicant will have total unsecured debt of less than 30 percent of gross annual income,” says Foley.

So if you have a $50,000 annual salary, for instance, a $15,000 personal loan would be considered affordable.

If you already have other unsecured debts, however, you’ll need to take that into consideration.

Credit cards and student loans are some of the most common forms of unsecured debt. And if you’re already carrying a balance on these debt types, you might have less room to take out a new unsecured personal loan.

Another way to figure out how much personal loan you can afford is to consider the debts you’re already repaying.

Before deciding how much to lend you, lenders often compare the amount of your overall debt to your income. This is also known as your debt-to-income (DTI) ratio.

“Affordability may vary depending on total debt obligations such as your student loans, auto loan or mortgage, other fixed expenses, and requested loan term,” Foley explains.

Divide your total monthly debt payments by your gross monthly income. Your monthly debt payments should include student loans, car loan, mortgage, credit cards, and any other debts.

So what is a favorable DTI?

“Affordability is viewed in the context of an applicant’s entire profile and may vary case-by-case,” Foley says. “Generally applicants with a debt-to-income of less than 50% will have a higher chance of approval.”

Your credit score doesn’t directly affect how affordable a loan is. However, it does show how responsible you are with debts.

“In general, lenders want to see that applicants are using credit responsibly and are not overextending themselves,” Foley says.

Some “indicators” lenders look out for, according to Foley, may include “high credit card balances, recent delinquencies, or high DTI.”

If you’ve missed payments or had delinquent accounts in the past, those are big red flags to lenders. And it could be a sign that you need to pay more attention to your finances and develop healthier money management.

Some lenders are flexible when it comes to the credit scores of borrowers. For instance, Pave and Citizens Bank have minimum credit scores under 700 for personal loan applicants.

Other lenders like SoFi don’t have a minimum FICO score for personal loan borrowers. However, applicants with SoFi typically have a score of 680 or higher.

Would this loan stretch my finances thin?

At the end of the day, no lender will have the same up-close view of your finances that you will. Or be able to answer your question “how big of a loan can I get?” Only you can truly determine whether a loan will stretch your finances too thin.

Even if you’re not at risk of missing payments, a personal loan might not be affordable if it keeps you from saving money or working toward other financial goals.

“When seeking a personal loan, potential borrowers should not be calculating the maximum possible payment they can afford,” Foley points out.

Instead, Foley recommends that borrowers should consider “the principal and payment amount that they can live with while still comfortably meeting existing debt obligations and being prepared for a rainy day.”

“It is important to leave some cushion,” adds Foley.

On top of considering what you can afford, limit how much you borrow to what you actually need.

“Requesting just the amount you need will put less strain on your finances and increase your chances of approval,” Foley says.

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