How Much Personal Loan Can I Get on Rs.40000 Salary in India?

how much personal loan can i get on 40000 salary

Picture this: Having heard about the benefits of personal loans, such as no collateral and affordable interest rates, you’re eagerly looking to apply for one with your 40000/- salary. There could be any reason: surprise travel you’ve been planning for your family, inevitable home transformation, debt consolidation, or your dream two-wheeler.

But you need to find out the loan amount banks and NBFCs offer for Rs. 40000 salary so you can plan your expenses accordingly.

Fret not. In this blog we discuss the possible loan amount lenders offer for a Rs. 40000/- salary. We’ll also evaluate the best way to apply for personal loans.

personal loan

What is a Personal Loan?

Banks and online lenders offer personal loans without collateral, so you don’t have to pledge any assets. Lenders approve these unsecured loans based on a borrower’s income, credit score, debt-to-income ratio, and employment history.

Factors that Determine Your Personal Loan Approval on a ₹40,000 Salary


Income is a critical parameter that lenders assess when approving personal loans. A stable job with a steady income assures the lenders that you will repay the loan every month without fail.

Lenders expect a minimum salary of Rs.15000 to approve personal loans. Also, the minimum salary criteria vary depending on the personal loan amount.


Age criteria differ for salaried and self-employed people. For salaried people, the age must be between 21 and 80 years. If you’re self-employed, you should be between 24 and 70 years old to apply for personal loans.

Employment History

Lenders also rely on your employment history to approve loans. How frequently have you been changing jobs? Is the organization you’re working for legitimate and reputed? These factors are considered as lenders aim to prevent fraud and losses.

Lenders consider frequent job changes a red flag and doubt whether you can pay the loan on time in case of unemployment. On the other hand, if you’ve been working in a company for more than two years, you’ll be sanctioned loans without any hassle.

Credit Score

A credit score between 300-850 indicates your creditworthiness based on various factors such as current debt, type of loans opted for, and repayment history. This credit score shows how promptly and responsibly you’ve been paying your previous loans.

The higher the credit score (700-800), the more likely you’ll get approved for personal loans with competitive interest rates. While online lenders still approve personal loans without decent credit scores (below 700), they consider other factors or offer only high interest rates.

Debt to income Ratio

The debt-to-income ratio measures the percentage of a person’s monthly income that contributes to paying debts. Debts are your credit card payments, mortgage, ongoing personal loan for two-wheeler, and student loans.

But how to calculate the DTI ratio?

DTI ratio = Debt payments/gross monthly income × 100

For example, Radha, opting for a personal loan, is looking to calculate her DTI ratio. Her income and debt payment bills are as follows:

  • Salary: 60000
  • Credit Card Bills: 5000
  • Ongoing Bike Loan: 7000

Total Debt Payments = 12000. Radha must set aside Rs.12000 every month to repay her loans. So, 12000/60000 × 100 gives a 20% DTI ratio.

If the DTI ratio is less than 35%, you have a high chance of getting approved for personal loans. As the DTI ratio increases (greater than 35%), your chances of getting approved decrease.

Also, Read: Get a Personal Loan for Salary of Rs. 12000

How Much Loan Can I Get on Rs.40000 Salary?

Let’s see how much amount you can opt for as a personal loan using two methods.

  • Multiplier Method
  • Fixed Obligation Income Ratio Method

Multiplier Method

The multiplier method is simple: banks and NBFCs use a predetermined multiple of the applicant’s income to calculate the loan amount. This multiple ranges mostly from 10 to 28.

So, for Rs.40000 salary, the minimum and maximum loan amounts are 4 lakh and 10 lakh respectively. Expect any amount between 4 lakh and 10 lakh as various factors will be considered.

Fixed Obligation Income Ratio

The Fixed Obligation Income Ratio (FOIR) method is similar to the Debt-to-income ratio method. FOIR measures the percentage of gross monthly income that contributes to total monthly expenses.

In this method, your rent and lifestyle expenses are taken into account in addition to your debt payments.

FOIR = Total monthly expenses/monthly income × 100

Lenders will approve personal loans if your FOIR ratio is between 50% and 55% and calculate the loan amount accordingly.

Documents Required for Personal Loan on a ₹40,000 Salary

  • Identity Proof: Aadhaar card, PAN card, or Voter ID
  • Residential Proof: Aadhaar card, Driving License or Passport
  • Income Proof: Bank statements for the past three months, pay slips and IT returns

Personal Loan on a ₹40,000 Salary Interest Rate

Interest rates depend on various factors such as income, credit score, and debt-to-income ratio. However, the average interest rates of different banks and NBFCs range from 12.5% to 24%. Take a look at the picture below to get an overview.

mPOKKET0%-48% per annum
MoneyTrap1.08% per month onward
CASHe2.50% per month
Axis Bank10.49%- 36.0%
IDFC FIRST Bank10.49%- 36.0% per annum
HDFC Bank10.50%-24.0% per annum
ICICI Bank10.75%-19.0% per annum
Bajaj Finance10.99% per annum onward
Kotak Mahindra Bank11.0%-39.0% per annum

Calculate EMI of Personal Loan on 40000 Salary

Where Can I Get a Personal Loan With Rs.40000 Salary?

There are two ways you can get a personal loan:

  • Conventional method such as a bank
  • Online lenders


Visit your regular bank and apply for a personal loan. Submit the documents and the bank will offer loans according to your eligibility.

Online Lenders

The application process is similar but what makes it remarkable are its benefits. Some benefits and perks of applying for personal loans online are:

  • Instant disbursal: Online lending marketplaces like Credmudra disburses the amount in 24-48 hours, helping you access the money almost instantly.
  • Minimum documentation: The process requires only minimum documents such as an Aadhaar card, PAN card, and pay slips.
  • Online process: Have you ever thought you could get approved for personal loans from the comfort of your home? Online lending makes it possible, and the process is 100% digital, so there’s no need to ask permission from your boss or compromise additional leaves to visit banks in person. Submit the application using the lender’s website, and the loan will be sanctioned after quick verification.
  • No restriction upon end-usage: You can use the personal loan for travel, home renovation, two-wheeler purchase or debt consolidation. There are no restrictions.
  • Flexible repayment tenure: One important benefit of online lending is that you can choose the repayment period that best suits your needs. According to your financial capacity, you can choose from 3 months to 5 years.

Though you can also apply for personal loans from banks, the time-consuming and hectic process can’t match the efficiency, flexibility, and seamlessness of online lending.

Also, Read: Personal loan For 15,000 Salary – Step By Step Guide

How to Apply for a Personal Loan with Rs.40000 Salary?

1. Research and Find a Credible Lender

Check reviews and choose credible lenders who follow strict security protocols and data privacy standards to avoid fraud and scams. A recent BBC undercover investigation report shows how fraudsters threaten and humiliate innocent people using instant loan apps.

2. Check the Eligibility Criteria

Check the lender’s website and ensure you meet their eligibility criteria for personal loans, such as age, salary, employment type, credit score, and debt-to-income ratio.

3. Repayment Tenure and Interest Rates

Verify their interest rates to afford personal loans that don’t affect your monthly expenses. Ensure that the lenders offer flexible repayment tenure so you can choose how you repay.

5. Finalize the Lender

Finalize the lender after verifying all these crucial details. The process seems overwhelming, right? Don’t worry! Use Credmudra’s Matchmaker and submit your requirements. We’ll match you with the best lender so that you can focus on your commitments.

6. Submit your Application

Submit your details including Aadhaar card number, PAN card number, salary, loan amount, and work details. The lender will complete the verification and sanction the loan in 24-48 hours.

Also, Read: How to get personal loan on Aadhaar card without PAN card?

Get an Instant Personal Loan using Credmudra

Let’s be real, no one loves to spend a day leaving all their work only to visit banks and get rejected for personal loans. So, why waste your valuable time when you can easily apply for personal loans using Credmudra? With an exceptional disbursal rate of more than 90%, Credmudra aims to help individuals with instant access to the required amount. Get additional benefits like flexible repayment tenure and affordable interest rates.

Sign up on Credmudra and get the loan amount to your bank account in 48 hours.


1. How Long does it take for Credmudra to Approve Personal Loans?

After you apply, Credmudra will immediately match you with the best lender. The lender completes a quick verification and you’ll receive the amount in 24 hours.

2. Why is Credmudra the Best Platform to Apply for Personal Loans?

Credmudra isn’t just another online lender, but a matchmaker that connects you with a suitable lender that matches your needs. This makes Credmudra the best in the market.

3. What is the Interest Rate for a Personal Loan on Rs.40000 Salary?

Average interest rates range from 12.5% to 24% and vary depending on income, existing loans, and credit score.

4. How to Choose the Best Online Lender to Apply for Personal Loans?

Analyze factors such as disbursal rate, seamless application process, repayment tenure, and instant disbursal and choose the best. If not, get Credmudra’s matchmaker and we’ll match you with the best lender.

5. How to Apply for Personal Loans Online?

Visit the lender’s website and submit your details, such as age, loan amount, income, PAN, and Aadhaar card number. The lender will verify the details, and you must submit the required documents to get sanctioned.

Also, Read: How Much Personal Loan Can I Get On Rs 25,000 Salary?

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