1. What is Personal Loan Eligibility?

The Personal Loan Eligibility Calculator determines the maximum loan amount (principal) you can borrow based on your affordable monthly payment, interest rate, and loan term. It helps Indian borrowers understand their borrowing capacity before applying for a loan.

2. How Does the Calculator Work?

The calculator uses the loan eligibility formula:

Where:

• \( P \) — Maximum loan amount (principal, INR)
• \( PMT \) — Affordable monthly payment (INR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan term in months

Explanation: The formula calculates the present value of a series of future payments (annuity) at a given interest rate.

3. Importance of Loan Eligibility Calculation

Details: Knowing your maximum eligible loan amount helps in financial planning, prevents loan application rejections, and ensures you don't overburden yourself with unaffordable debt.

4. Using the Calculator

Tips: Enter your comfortable monthly payment, current interest rate offered by lenders, and desired repayment period. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical interest rate for personal loans in India?
A: Rates vary between 10-24% annually depending on credit score, income, and lender policies.

Q2: How does loan term affect eligibility?
A: Longer terms increase eligibility but result in higher total interest paid. Shorter terms reduce eligibility but save on interest.

Q3: What factors affect actual loan approval?
A: Lenders also consider credit score, income stability, employment type, existing debts, and relationship with the bank.

Q4: Is there a maximum loan amount in India?
A: Most banks offer up to ₹25-40 lakhs for personal loans, depending on income (typically 10-24 times monthly income).

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual eligibility may vary based on lender policies and your complete financial profile.