Personal loan for Rs 20,000 salary: Interest rates to eligibility, check key factors before applying

Unexpected expenses can strike anytime — medical bills, home repairs or an urgent purchase. If you are earning Rs 20,000 per month and looking forward to applying for a personal loan, you might wonder if you are eligible.

The good news is that many banks and financial institutions offer personal loans even for those with modest salaries. Personal loans are attractive because they don’t require collateral, but eligibility depends on factors like income stability, credit score and your employer’s profile.

Let’s break down the key criteria that determine your loan eligibility and explore which banks provide personal loans for a Rs 20,000 salary.

Understanding Personal Loan Eligibility For A Rs 20,000 Salary

A personal loan is a type of unsecured loan, meaning you don’t have to offer any asset as collateral. With Moneycontrol, you can experience the ease of securing a 100% digital and instant personal loan. With zero paperwork and a low processing fee, you can get the funds transferred directly to your bank account in no time.

The application process is simple — enter your details, complete the KYC verification and set up your EMI repayment plan.

Moneycontrol has partnered with eight leading lenders to provide access to instant loans of up to Rs 50 lakhs. With transparent terms, no hidden charges, and interest rates starting at 10.5% per annum, borrowing has never been easier.

Eligibility Criteria For Personal Loan On Rs 20,000 Salary

The amount you can secure with a Rs 20,000 salary depends on several factors that banks and Non-Banking Financial Companies (NBFCs) evaluate before approving your application.

• Minimum salary requirement: Most banks set a minimum monthly income threshold for personal loans. While some banks require at least Rs 25,000 to Rs 30,000, others offer loans to those earning Rs 20,000, especially if they work for reputed companies or have a good credit score.


• Credit score: Your credit score plays a major role in loan approval. A score of 750 or above increases the chances of approval. If your credit score is lower, lenders may offer a lower loan amount or charge higher interest rates. And with a salary of Rs 20,000, you may not be eligible at all for a loan.


• Employment stability: Banks prefer salaried applicants working with reputed companies, government organisations or well-established private companies. Ideally, you should have at least one year of work experience, with a minimum of six months in your current job.


• Debt-to-income ratio: If you have any existing loan or credit card bills, lenders check how much of your salary is already committed to that. Ideally, your total EMI obligations should not exceed 40% to 50% of your net income.

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Banks That Offer Personal Loans for Rs 20,000 Salary

Here are some banks and financial institutions offering personal loans to those with a monthly salary of Rs 20,000:

• Axis Bank: Minimum salary requirement is Rs 15,000.


• Union Bank of India: For metropolitan cities like Delhi, Mumbai, Pune, Chennai, Kolkata, Bengaluru, and Ahmedabad, the least required salary is ₹20,000. In other cities, applicants must have a minimum gross salary of ₹15,000 to qualify.


• State Bank of India (SBI): SBI offers personal loans to people with a minimum salary of Rs 15,000 in select cities and Rs 20,000 in others to meet a variety of needs.


• Tata Capital: Offers personal loan with a minimum monthly income of Rs 15,000.

If you are looking for a personal loan with Rs 20,000 salary, you can also explore the online platforms like Moneycontrol. As many as eight lenders are offering personal loans up to Rs 50 lakhs in partnership with Moneycontrol. The interest rates start at only 10.5% per annum. The entirely paperless application process also ensures a quick approval and disbursement.

How Much Personal Loan Can You Get On A Rs 20,000 Salary?

Your eligibility for a personal loan largely depends on your monthly income and financial obligations. If you earn Rs 20,000 per month, banks and NBFCs assess your disposable income — your earnings after accounting for monthly expenses and existing debts — to determine how much you can borrow.

How To Improve Your Chances Of Loan Approval

If you’re worried about loan approval due to a lower salary, here are a few ways in which you can improve your chances:

• Maintain a good credit score: Pay your bills and EMIs on time, and avoid defaults. A higher credit score increases loan eligibility.


• Reduce existing debts: If your debt-to-income ratio is high, try to close smaller loans before applying for a new one.


• Pick a lower loan amount: If you are eligible for a lower amount, consider applying for a smaller loan and increasing it later when your income grows.


• Apply with a co-applicant: If possible, apply for a loan jointly with a family member who has a stable income and good credit score.


• Choose a longer repayment tenure: Opting for a longer tenure reduces monthly EMI, making it easier to qualify for the loan.

Documents Required For A Personal Loan On A Rs 20,000 Salary

• Identity Proof: Aadhaar card, PAN card, voter ID, or passport.


• Address Proof: Utility bills, rent agreement, or any government-issued document.


• Income Proof: Recent salary slips and bank statements for the last six months.


• KYC Documents: Aadhaar card, PAN card, and either a passport or driving licence.

In conclusion, if you earn Rs 20,000 per month, you can still get a personal loan, though the amount may be limited based on your creditworthiness. Many banks and NBFCs offer loans to those in this salary bracket, provided they have a stable income, good credit score and manageable financial obligations.