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A personal loan on salary is an unsecured loan banks offer to working professionals after assessing their monthly income. It is the ideal choice for individuals earning lower monthly salaries, such as Rs. 15,000 to Rs. 25,000. Generally, the granted loan amount ranges from Rs. 10,000 to over Rs. 10 lakh with repayment tenures of 3 to 60 months. To approve a low-salary personal loan, most lenders require you to have a CIBIL score of 700 or higher.<\/em><\/p>\n\n\n\n A salary loan is a collateral-free financing solution designed for individuals earning a monthly salary of Rs. 15,000 to Rs. 25,000.<\/p>\n\n\n\n Do you need a personal loan but are worried that you won\u2019t be eligible because your salary is too low? You are not alone. Many people in the low-income bracket need additional funds for emergencies, education, weddings, or unexpected expenses. The good news is that lenders do offer low-salary personal loans.<\/p>\n\n\n\n This article explains everything you need to know about a personal loan<\/a> for a low-salary applicant, including its meaning, eligibility criteria, interest rates, repayment options, and more.<\/p>\n\n\n\n A low-salary personal loan is a specific type of unsecured loan designed for individuals with a modest monthly income. Unlike regular personal loans, which often require higher income levels and have stringent eligibility criteria, these low-income personal loans cater to salaried employees in entry-level businesses or junior positions who might otherwise struggle to get access to credit. For example, junior associates, restaurant staff, cleaners, clerks, delivery boys, etc.<\/p>\n\n\n\n Banks and Non-Banking Financial Corporations<\/a> (NBFCs) offer low-salary personal loans to promote financial inclusion and help low-income earners tackle medical emergencies, education expenses, and other financial requirements. These loans typically have no end-usage restrictions and entail smaller loan amounts, shorter tenures, and flexible repayment terms.<\/p>\n\n\n\n All salaried individuals with a monthly income of up to Rs. 15,000 can apply for a low-salary personal loan. Having said that, it\u2019s crucial to note that the eligibility criteria may vary from one financial institution to another. Some lenders may also consider the applicant\u2019s job profile, employment stability, employer\u2019s reputation, and credit score apart from their income level.<\/p>\n\n\n\n As mentioned, the eligibility criteria for a low-income personal loan vary from one lender to another. Each bank or NBFC generally has its own set of parameters to approve or reject loan applications. Here are some common factors they consider:<\/p>\n\n\n\n The applicant\u2019s salary or monthly income is the most crucial factor that can influence their eligibility to avail of a personal loan. Low-income personal loans are usually offered to salaried employees earning between Rs. 12,000 and Rs. 15,000 per month. Several banks and NBFCs in India offer distinct personal loans for a salary of Rs. 14,000, a personal loan for a salary of Rs. 12,000, and a Rs. 13,000 salary personal loan.<\/p>\n\n\n\n Another crucial factor that can influence the low-salary personal loan eligibility<\/a> is the applicant\u2019s age. Most lenders prefer offering these loans to salaried individuals aged between 21 and 60 years. However, this range is not fixed and may vary from lender to lender.<\/p>\n\n\n\n The type of employment and the status of the employer may also influence the lender\u2019s decision to approve or reject a personal loan application<\/a>. Generally, salaried employees working in private or public sector organizations are preferred. However, some NBFCs also extend credit to those working with small companies or in the informal sector.<\/p>\n\n\n\n An applicant with longer work experience has better chances of qualifying for a low-income personal loan as compared to someone who has recently started working. Better job stability reassures lenders of timely repayment.<\/p>\n\n\n\n Last but not least, lenders look at an applicant\u2019s credit score<\/a> before approving their loan application. A credit score of 700 or above significantly improves approval chances.<\/p>\n\n\n\n Since low-salary personal loans are given to those with a modest income, they typically entail smaller loan amounts and shorter repayment tenures. The maximum amount an individual can borrow and the maximum tenure depend on their income and repayment capability. Factors such as credit score and existing liabilities also play a crucial role. Lenders usually offer loan amounts ranging between Rs. 25,000 and Rs. 5 lakhs for low-income earners. The repayment tenures for these loans may range from 12 to 60 months.<\/p>\n\n\n\n The borrower must choose an appropriate loan amount and tenure that fits comfortably within their monthly repayment capacity. A longer tenure reduces the Equated Monthly Installments (EMIs) burden but increases total interest outflow. On the other hand, a shorter tenure leads to higher EMIs but faster loan closure and lower interest outgo. Flexible personal loan options help low-income earners manage short-term financial needs without disrupting their monthly budget.<\/p>\n\n\n\n The table below depicts how EMIs and the total interest may vary with tenure for a personal loan of Rs. 1 lakh<\/a> at an interest rate of 14% per annum:<\/p>\n\n\n\n <\/p>\n\n\n\nWhat is a low-salary personal loan?<\/strong><\/h2>\n\n\n\n
How do they work?<\/strong><\/h2>\n\n\n\n
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What are the eligibility criteria for a low-salary personal loan?<\/strong><\/h2>\n\n\n\n
\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Salary or monthly income<\/strong><\/h3>\n\n\n\n
\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Age<\/strong><\/h3>\n\n\n\n
\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Employment type<\/strong><\/h3>\n\n\n\n
\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Work experience<\/strong><\/h3>\n\n\n\n
\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Credit score<\/strong><\/h3>\n\n\n\n
What are the documents required for a low-salary personal loan?<\/strong><\/h3>\n\n\n\n
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What are the loan amount and tenure options?<\/strong><\/h2>\n\n\n\n