Many people think that the highest personal loan amount is based solely on income. However, the truth is that banks consider a set of factors related to affordability, risk, and repayment behavior before determining the amount. Two people with the same income can have vastly different loan approvals because banks assess EMI, liabilities, and credit behavior, not just income.
This article will help you understand how banks determine personal loan eligibility, what factors determine the maximum personal loan amount, and tips on how to increase personal loan amount without affecting your credit profile.
What Is the Maximum Personal Loan Amount in India?
Personal loans in India start from ₹5,000 and the highest loan amount in India can vary between ₹25 lakh to ₹50 lakh. But the highest amount is not always approved. This happens only when the borrower has high financial stability.
The lenders do not have fixed loan amounts. They calculate a personalised maximum depending on the risk.
The most important rule:
The loan amount is determined by your repayment ability, not by how much you borrow.
How Lenders Calculate Loan Eligibility:
Banks primarily rely on something called FOIR (Fixed Obligation to Income Ratio).
It determines how much of your income is already going towards EMI payments.
The general rule is that lenders permit 40% to 55% of your monthly income to be allocated towards EMI payments.
Example Calculation
| Monthly Salary | Existing EMIs | Allowed EMI (50%) | New EMI Possible | Approx Loan Eligibility* |
| ₹30,000 | ₹5,000 | ₹15,000 | ₹10,000 | ₹1.2 – ₹1.6 lakh |
| ₹50,000 | ₹8,000 | ₹25,000 | ₹17,000 | ₹2.5 – ₹3.5 lakh |
| ₹80,000 | ₹15,000 | ₹40,000 | ₹25,000 | ₹4 – ₹6 lakh |
| ₹1,20,000 | ₹20,000 | ₹60,000 | ₹40,000 | ₹8 – ₹12 lakh |
*Approximate values assuming average interest and tenure
This is the reason why your salary doesn’t determine the maximum personal loan amount.
Factors That Determine the Unsecured Personal Loan Maximum Amount:
1. EMI Handling Capability (Most Important)
High-income individuals are offered less if they already have high EMIs.
2. Credit Score and Behavior
It is not just the credit score that lenders check; they also check:
- Late payments
- Frequent borrowing
- Credit card usage behavior
3. Job Security
Job security has a greater impact than income growth.
4. Bank Account Cash Flow
Salary credits have a greater impact than the CTC.
5. History of Repayment of Previous Loans
Successful closure of previous loans boosts the trust score within the lender.
Why Two People With Same Salary Get Different Loan Offers
| Applicant | Salary | Credit Behaviour | Existing EMIs | Loan Approved |
| Person A | ₹60,000 | Pays bills on time | ₹5,000 | ₹5.5 lakh |
| Person B | ₹60,000 | Credit card maxed often | ₹18,000 | ₹2.2 lakh |
The difference is never just the income, it depends on the credit behaviour as well. Hence, it is very important to maintain good financial behaviour with your credit score.
Ways To Increase The Personal Loan Amount Safely:
Borrowers often attempt multiple applications to raise the loan amount. This is actually counterproductive. Rather, the lender responds to signals of risk improvement.
- Reduce Existing EMIs First
Paying off one small loan can help raise the loan amount substantially.
- Improve Credit Utilization
Use credit cards less than 30%.
This helps raise the trust score immediately.
- Increase the Loan Tenure
Longer tenure reduces EMI → raises the eligible amount.
- Ensure Consistent Salary Credits
Avoid unpredictable deposits before applying.
- Avoid Multiple Applications
Each application generates a hard inquiry, reducing the confidence level for approval.
Strategy To Follow:
Step 1: Pay off the first EMI of a smaller loan
Begin by repaying a smaller running loan – even an EMI of ₹2,000 to ₹3,000 per month makes a huge impact. Lenders compute eligibility based on your free income after obligations. After clearing this EMI, your repayment capacity improves immediately, which can boost your loan eligibility by approximately ₹50,000 to ₹80,000, depending on the tenure and interest rate.
Step 2: Lower credit card usage
If your credit card usage is high (above 70-80%), pay it off to below 30% of the credit limit. High usage indicates financial distress to the lender.
Step 3: Wait for 30-45 days
Credit reports are not updated immediately. After closing loans or decreasing balances, allow credit bureaus to update your report. Applying too soon will not allow lenders to see the positive change.
Step 4: Apply only once
Once your report has been updated, apply to a suitable lender. Applying once will give you a better chance of approval and may also qualify you for a higher loan amount.
How Credit Behaviour Influences the Maximum Loan Amount
Banks categorize customers into 3 groups:
Low Risk
- Making regular payments
- Low usage
→ Largest loan amounts approved
Moderate Risk
- Occasional late payments
→ Medium loan amounts approved
High Risk
- Frequent borrowing & high balances
→ Smallest loans or rejection
Thus, the maximum personal loan amount is more influenced by credit behaviour than income.
Digital Lending Assessment in Today’s World:
The way fintech companies assess affordability has changed.
They no longer depend on the credit score alone but consider:
- Banking transactions
- Spend habits
- Income stability
- Repayment ability trend
Fintech platforms such as Olyv facilitate instant personal loans up to Rs.5,00,000/- and help the borrowers to check and understand eligibility criteria, thus allowing borrowers to avoid multiple hard inquiries while searching for appropriate loan amounts.
Common Errors That Can Lower the Loan Amount:
There are various common mistakes that can be the cause for your lower personal loan amount. Understanding these factors will help you determine the factors early and be prepared.
Here are some mistakes you can avoid:
- Applying for a loan immediately after a job change
- Applying for the full credit limit on credit cards
- Taking frequent buy-now, pay-later loans
- Applying to 5-6 lenders simultaneously
- Having multiple small active loans
These not only lower the chances of loan approval but also lower the maximum amount of unsecured personal loans.
Tips To Consider Before Applying:
- EMI affordability check first
- Credit utilization reduction
- No new loans for 30 days
- Salary consistency
- Apply only once after preparation
Before applying for a loan, consider and follow these simple tips for easy and fast loan approval.
Final Thoughts:
The maximum personal loan amount is not a fixed number offered by lenders, but a financial trust limit calculated based on repayment behavior, existing debt, and risk profile. Salary is a consideration, but affordability is an even bigger one. People who use credit cards well, have stable income, and keep active debts low can often get approvals for much higher amounts than those with higher salaries but erratic credit card use.
Understanding the logic of unsecured personal loans maximum amount will help you plan instead of just guessing. Instead of applying every month, you can improve your financial signals to get a higher approval amount in a month. Services that enable you to compare lenders in one place, such as Olyv, can also assist you in finding a suitable loan amount without making unnecessary credit inquiries.
In short: lenders don’t reward income, they reward predictability.
Make your financial behavior predictable, and the loan amount will automatically go up.
