Lenders typically use two methods: a salary multiplier of 10-24 times your monthly net salary, or the FOIR method, which caps total EMIs at 40-50% of your income. For example, on a ₹40,000 salary, this generally works out to a loan range of ₹4-9.6 lakhs, with an EMI capacity of roughly ₹16,000-20,000 per month.
These two methods don't always agree, and lenders generally apply whichever produces the more conservative (lower) figure — so if the salary multiplier suggests a higher eligible amount than the FOIR calculation, the FOIR number usually wins. This is a common source of confusion when people compare a generic 'X times your salary' rule of thumb against the actual offer they receive.
Net salary — not gross — is what's used in these calculations. If your salary slip shows deductions for PF, professional tax, or other items, lenders base eligibility on the in-hand amount, not your CTC.
Because the exact multiplier and FOIR threshold vary by lender, the same salary can produce noticeably different eligible amounts at different banks or NBFCs. Finolink compares offers from 15+ lenders so you see your realistic range across all of them, rather than one institution's estimate.
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