SBI personal loan eligibility calculator

The State bank of India (SBI) has been the undisputed market leader in the Indian banking sector for many years now. This government-owned bank is also ranked 45th in the prestigious list of the largest public sector banks in the world. It is currently having a huge customer base of more than 500 million and an enviable asset size of Rs. 40 lakh crores at its disposal.

SBI personal loans are one of the most popular ones that come with attractive loan products to meet the diverse requirements of all segments such as salaried, self-employed, working professionals as well as pensioners. Some of the most sought after personal loan products of SBI are- SBI pension loans, SBI Saral personal loan, SBI Xpress credit personal loan etc.

What is SBI personal loan Eligibility?

Any Indian resident is eligible to avail an SBI personal loan for the below-mentioned reasons-

  • Medical treatment
  • Marriage
  • Foreign travel
  • Education
  • Any other genuine purpose

When it comes to the target group eligibility, the following pre-defined target groups are eligible to apply for an SBI personal loan, provided they meet the specified minimum income criteria of the SBI-

  • Salaried employees
  • Self-employed professionals and businessmen
  • Pensioners of Central Government/ State Government / Armed Forces

What is an SBI personal loan eligibility calculator?

The SBI personal loan eligibility calculator can be of tremendous help for you to ascertain your eligibility for an SBI personal loan. This is an easy-to-use tool, but to get accurate results, you should be having details such as –

  • Net Monthly Income (NMI): The NMI refers to the income earned by you on any given month.
  • Existing EMI, if any: If you have any current liability in the form of an EMI, then provide the amount in the appropriate space provided.
  • The rate of interest: Provide the interest rate offered by the SBI to the personal loan borrowers.
  • Loan Tenure: Enter the loan tenure (in number of months) during which you wish to repay the personal loan to the State bank of India.

How does the SBI personal loan eligibility calculator work?

The SBI personal loan eligibility calculator works on the basis of the following two methods-

  • Multiplier method-

In this method, the SBI applies a multiplier to the take-home salary of the borrower in order to calculate his personal loan eligibility. This multiplier is actually a function of the organisational profile and take-home salary of the borrower. If the borrower works for a reputed organisation and earns a hefty monthly salary, the multiplier will be high and it will impact his personal loan eligibility positively. It will also enable the borrower to be eligible for the best personal loan offers from SBI too.

  • Fixed Obligation to Income Ratio (FOIR) method

Here, the State Bank of India looks into the net income of the applicant and ascertains the maximum EMI he can afford every month. The bank also looks into other fixed expenses the applicant is currently dealing with (such as his existing EMIs and rents).  Usually, it is acceptable for the SBI that about 50 % to 65 % of the monthly income is consumed by EMIs, credit card payments or other fixed expenses/obligations.  If the percentage exceeds further, the SBI may either decide to reduce the loan amount to approve or may increase the personal loan tenure and reduce the EMI amount. The bank may exercise a bit of leniency if a borrower can show high affordable income by adding income from other sources.

The following illustration will help you to understand it better-

Sunil works as a manager in Reliance Life and draws a monthly take-home salary of Rs 50,000. He does not have any fixed obligations/EMIs to pay at present. He wants to avail an SBI Saral personal loan which has a maximum FOIR fixed at 50 %. Therefore, as per this provision, the SBI can lend Mr Sunil a loan amount so that his EMI does not exceed Rs 25,000, which is 50 % of his take-home salary on a given month. Now, with a prevailing interest rate of 10.99 %, the bank can grant Mr Sunil a maximum loan amount of Rs 11.50 lakhs for loan tenure of 5 years.

Let’s consider another scenario where Mr Sunil has an obligation to pay an auto loan EMI of Rs 10,000 every month. In this case, he will only be eligible to avail an SBI personal loan where the EMI does not exceed Rs 15,000. Therefore, the SBI will do revised calculations and make him eligible for a maximum SBI personal loan amount of Rs 4.60 lakhs at the prevailing interest rate of 10.99% and the loan tenure of 5 years.

As a usual practice, the State Bank of India calculates the eligibility of an applicant with both the above-mentioned methods and then approves the lower of the two loan amounts thus calculated to him.

Increase your SBI personal loan eligibility

By considering the following points, you can boost your SBI personal loan eligibility to a great extent.

  • Opt for a longer SBI personal loan tenure

A longer loan tenure will convey to the SBI that you have the capability to handle your finances for a longer period and you can continue to repay the loan on time for a longer time period. Thus, choosing a longer tenure for the SBI personal loan will do a world of good to enhance your personal loan eligibility.

  • Keep an eye on your debt to income ratio

Your DTI or debt to income ratio informs the Bank whether you can repay the EMI amount in time every single month and how responsible you are in managing money. DTI is expressed in percentage and a high percentage conveys you are consuming a bigger portion of your income in paying existing debts. Hence, you should keep an eye on your DTI from time to time. If you find it to be over 43 %, you would be better off paying out some of your existing debts. It will lower your DTI percentage and will enhance your SBI personal loan eligibility.

  • Check your credit score from time to time and take adequate measures to improve it

Please note that your credit score is a critical determinant for the SBI to ascertain your personal loan eligibility and you should make a continuous effort to improve your credit score.

If you have a poor credit score your SBI personal loan application might get rejected. Even if SBI approves your application somehow, the loan may be granted with a higher interest rate and with other unfavourable terms and conditions, in comparison to borrowers with excellent credit scores.

Ask for a copy of your credit report from the premier credit bureaus to check your credit score and rectify errors, if any. Make efforts to improve your credit scores (such as paying your EMIs on time, paying off debts faster and so on).

  • Apply only for the SBI loan amount you need

Make a correct assessment of your loan requirement and repayment capacity before applying for an SBI personal loan. A higher loan amount results in a higher EMI, which should not go beyond your affordable range. You can use accurate online tools such as the Afinoz personal loan EMI calculator to get a perfect understanding of your financial position. Before granting a personal loan, the SBI also assesses your financial position and repayment capacity. Therefore, you should apply only for the loan amount that matches your affordability. It will increase your eligibility for the SBI personal loan.

  • Avoid multiple applications

If you apply for different personal loans simultaneously, the probability of getting your SBI personal loan application approved is less as it impacts your personal loan eligibility negatively.

Every time you apply for a loan, the provider generates a request to the premier credit bureaus for your credit report. This is called a "hard look". Such reports invariably contain the date of request and the intended purpose. If multiple queries are generated from different providers within a short span of time, your credit report will duly reflect this. Now, if you apply for an SBI personal loan, your credit report with such a refection will lead the SBI to note your behaviour as "Credit Hungry”. It will badly impact your SBI personal loan eligibility.

Hope the above-mentioned points will help you sort out issues related to your SBI personal loan eligibility if there is any. The easy-to-use SBI personal loan eligibility calculator takes into account all the factors that affect loan eligibility for an applicant and gives an accurate assessment of your eligibility for the SBI personal loan.

    Before deciding on the SBI personal loan product to avail, it is absolutely essential for you to be sure about your personal loan eligibility. Having a thorough idea of personal loan eligibility will not only simplify your application process but will also help you to get the best personal loan offers from SBI

Latest News