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2 mins Read | 11 Months Ago

I Need a Personal Loan! How Much Should I be Earning?

I Need a Personal Loan! How Much Should I be Earning?


At times, life throws challenges or uncertainty and there are times when people may require more money than they have at hand. A quick and convenient Personal Loan can shine through as a collateral-free option that can be paid off through affordable Equated Monthly Instalments (EMIs). Aspiring borrowers need to be earning a stable income and have a good credit score for a Personal Loan to get quick approval on their loan applications.

A good credit score for a Personal Loan is what a web check-in would be for air travel. It is quicker and makes things more convenient. A lot of people with good credit scores are eligible for pre-approval from their financial institutions.

While a Personal Loan can help meet just about any financial need, one must meet a few eligibility requirements. As mentioned, the first thing a lender will consider while examining a loan application is the applicant’s income and credit score. While there are a few ways to get a Personal Loan with no credit history, there are almost next to none without a stable income. Financial institutions require self-employed and employed borrowers to earn a certain amount of money for approving their loan applications.

Read on to know how much money you should be earning for getting a Personal Loan.

Salary Required for Personal Loan Approval

It is not just the ‘salary’ lenders look at while reviewing Personal Loan applications, there are other factors as well. An applicant’s cash flow and Debt-to-Income (DTI) ratio are also assessed before granting any loan approval.

Banks and other financial institutions have Personal Loan eligibility criteria when it comes to the minimum ‘salary’ of the loan applicant. For this category, ICICI Bank requires applicants to earn a salary of at least Rs 30,000 a month, although that changes depending upon an applicant’s location. They must also have a minimum 2 years of work experience with their current employer or overall in their professional career. Applicants also need to have been residing in their current residence for at least a year.

Remember, while these are the broadly mandated requirements for salaried applicants, the minimum salary required will also depend on the profile of the job, the type of employer and whether applicants have an existing relationship with ICICI Bank.

Now what about self-employed people? What ‘salary’ requirements do they need to meet for getting a Personal Loan?

At ICICI Bank, self-employed Personal Loan applicants must show a ‘minimum turnover’ and not a salary. A turnover is a business’s gross revenue. Self-employed non-professionals must earn a turnover of at least Rs 40 lakh and professionals must be able to show a minimum turnover of Rs 15 lakh as per their audited financials.

After the minimum turnover, self-employed applicants need to show they earn a minimum profit after tax. This is a minimum of Rs 2 lakh for proprietorship firms and non-professionals. Conversely, it is Rs 1 lakh for self-employed professionals.

Self-employed applicants also need to have been in business for a minimum period of time. While doctors need to have been running their business for at least three years, other self-employed individuals must have been doing so for a minimum of 5 years.

Whatever your reason for needing a Personal Loan, there is a requirement of a predetermined monthly income. Different lenders have different minimum income requirements. The minimum income criteria also depends on the lender you are applying for a loan and in which tier city you reside.

Other Requirements for a Personal Loan

Income is not the only criteria your application is reviewed on. Other factors that contribute to the decision are:

1. DTI Ratio

The DTI ratio is a crucial metric that combines all your debt and divides it by your monthly income. This is one of the first things lenders look at as it helps them understand if the borrower is well placed to repay the loan amount since this ratio includes debt, insurance payments, and taxes.

Banks use your DTI ratio when determining whether you can repay the loan. Any value of more than 40% is not ideal.

2. Age

Younger borrowers have a better chance of getting approval for a Personal Loan. Usually, 21 to 60 years is the broad range for salaried individuals and about 25-65 for self-employed individuals to be eligible for a Personal Loan.

3. Credit Score

A credit score for a Personal Loan significantly impacts your eligibility for the loan. If your score is above 750, you don't have anything to worry about, as you have a higher chance of getting a loan sanctioned.

4. Employer

If you work in a reputed MNC, you can get a Personal Loan easily though this is not universally applicable. However working in a reputed company can only serve as an asset that shows you have strong backing and can repay the loan borrowed.

Personal Loans have become popular and a lot of people often look out for the best way to get a Personal Loan with no credit checks. Banks like ICICI Bank have made this possible by offering pre-approved Personal Loans to existing customers who have banked for a certain number of years or honoured their previous loans. Pre-approved customers can get instant approval on their Personal Loan applications online within no time, with no or minimum documentation.


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