How much Loan can I get on my Salary in India?

By Anil Gupta, 14  Finance

You can get about 60 times the amount of your net monthly salary as home loan. Car loan eligibility is based on car value and your in-hand net salary.


How much loan can i get from bank is a pretty popular question once you start looking around to buy something. It can be a house, a car or any other expensive item that you are looking to get financed from bank.

The rule of thumb that most bank’s follow is to multiply your net salary by 60 to reach at the maximum loan (especially house) amount that you can get.

In this article, we are trying to present the bank’s salary calculation with respect to your net salary and how much housing loan (or for that matter any kind of loan) they can give you on your current salary.

This is applicable to any public sector bank like SBI, PNB or a private sector bank like ICICI, HDFC.

Calculate Home loan Eligibility – Salary Professional

Your net salary is what is most important, while calculating the eligibility for total loan amount.

Normally, all banks provide home loans up-to 60 times your monthly NET pay. This certainly, can vary from case to case basis and your personal credit rating.

95% of the cases, though, fall under the 60 times rule and banks rarely breach this limit to limit their loan loss.

Example scenario we will talk about:

  1. Your monthly in-hand (take home or net pay) salary is INR 50,000. Looking for a home loan of about 30 lakhs. Real Estate property cost: 40 lakh.
  2. Your gross monthly income might be much more than INR 50,000 per month. Bank only considers your in-hand salary. Calculate your in-hand salary.
  3. You don’t have any other loan like car or personal on your name. You do have 1 credit card with credit limit of INR 10,000.
  4. Bank rules say that you are eligible to get 60 times your monthly NET pay as loan. Read on to find out how much loan do you qualify for.

Well, all sounds good till the time you are talking to your bank executive or an agent over phone to ask “How much can I qualify for“.
They ask your net pay, your answer, 50K per month¬†immediately prompts them to say “you are pre-approved for 30 lakhs of loan“.

You are excited that your worries about ‘how much loan will I get approved for’ has been answered.

How much loan can I get on my salary in India

How much loan can I get on my salary in India

But things change dramatically, after you have actually applied, submitted your salary slips and have paid the loan processing fees. The bank will evaluate your loan eligibility once again and this time it will most probably come out to be much less than what was communicated over phone (recall the 60 times rule).

You start wondering about what has changed? You salary slips still show the same 50K as net pay and you don’t have any other loan.

Then how come the eligibility has come down? Is bank not interested in giving out that much loan or the rule of 60 times your net pay is just a marketing gimmick?

Calculating ‘NET Salary’ as Bank would do

What you are pre-approved or pre-qualified for could be vastly different from what you bank would finance you.

The catch could be anything from a bank’s marketing strategy to attract customers or your low credit score.

Assuming bank played no gimmick and your credit score is ‘Good or excellent’, it is definitely your salary components reducing your over-all loan pre-approved amount.

Take a closer look at your salary slip and check these components in RED (some may not be there at all, that’s OK):
A standard pay slip (one month) in our example might look like this (I have taken all sample values):

EarningsAmountDeductionsAmount
Basic Salary15,000Provident Fund1,800
Conveyance Allowance800Income Tax1250
HRA7,500
LTA3,500
Medical Allowance1,250
Special Allowance25,000
Total53,0503,050
NET pay50,000 (53,050 – 3,050)

The components in RED (LTA and Medical) are not considered part of your in-hand income by most banks (like SBI) specifically for housing loan.

In this case, even though your salary slips shows Rs. 50,000 as NET pay, bank will NOT consider LTA and Medical allowance as a money which would be available with you for spending on loan EMI.

Bank believes that you will actually spend these allowances on the activities which they are designated for.

The result is your decreased qualification as shown here:

Net pay as per salary slip :50,000
– LTA amount3,500
– Medical Allowance1,250
New Net Pay45,250
Now, calculate your NEW eligibility = 27,15,000 (45250 * 60)
Which is lower than earlier eligibility by about 10% i.e. 2,85,000.

If you had planned your finances keeping in mind that you would get a loan of 30 lakhs by bank and manage other money yourself, you now would need to pool in 2,85,000 more.

How much Loan can I get approved for?

The final approved or sanctioned amount still needs more checks.
In addition, there are expenses that bank will get to know from your credit history report and will further reduce your loan eligibilty:

  1. Credit card minimum balances: If you shop around using credit cards, you do get monthly bills and bank knows this. The total of ‘minimum payment‘ each month on all cards is REQUIRED to be deducted from your NET pay to reach the loan eligibility.

    This is generally 10% of your total credit limit. In our example, this comes out to be INR 1,000 per month.

    Now, reduce your NET pay (45,250) by another 1k to reach at 44,250.
  2. Car Loan/Personal Loan/ Gold loan: If you have an existing loan, do deduct the monthly EMI amount from your net pay.

    In our case, we have assumed to have none. If you do have one, deduct the monthly EMI from the Net Pay calculated in above point.
  3. Home rent: If you are trying to take home loan for an ‘under construction‘ property, the bank will reduce the loan eligibility amount by the rent you pay monthly.

    We have assumed to be buying ready to move in home and hence no more deductions.

At this point, you should have the NET pay (44,250) that bank will consider for finding your maximum loan qualification.

To answer your question: ‘How much loan will i get approved for’, simply multiply 44,250 by 60.

How much Car loan can I get?

The loan eligibility calculator is with you, if you have read the above information. Simply multiply the net pay and you reach a maximum amount.

I hope you would have understood the concept. I would urge you to keep these calculations in mind and do not blindly believe what bank sales executive commits, as he is more interested in bringing a client to bank.

You will get to know these details only when you would have actually paid the non-refundable processing fees of the bank. You would have no option but to go on with it and find out other ways of financing the deficit amount.

Comments, suggestions and queries are most welcome.

  • Dashanth babu

    Hello sir im working in private shop and my salary is 45k iam looking for loans but i dont have pay slips i use to get salary by hand since 6 months from this month i ask my boss to give salary check he is ready to give but bank people are refusing to give loans i need loan 18 lacks how can i get this could you any one please help me with this issue?

  • You have to follow the bank rules. As far as i know, they will not give loan without salary slips as proof.

  • Prasenit Chatterjee

    Hello Sir. I’m working in a proprietorship enterprise & my take home salary is 52000/-. Am I eligible for housing loan and if yes, how much?

  • Each bank has its own rules for loan limits but most of them just follow the rule where they multiply the take home salary by 60.
    So, in your case, it should be 52000 * 60 = 31,20,000

    If you have any other income or you can add someone else’s income in your family, then the limit can be increased too.

  • Jaya Prathap

    Hi Anil,
    Question is about house loan , lets say site value is 50L and i will be having 10L for down payment and owner informed that according to government rate(25L) pay the cash from bank and remaining amount(25L) pay in cash(cheque), now i am short of 15 lakhs , if i am eligible for 80% loan from bank , now does bank will hand over to me remaining loan amount as cheque or DD.How is the process and what should i do?

  • Hrushi

    Hi Anil, I am a salaried employee and my wife also salaried employee.
    Q.No.1. If i we want buy 20lakhs site , how much loan amount we can get it? And is it covered under home loan or personal loan?
    Q.No.2. If we have the 15lakh valuable site , to construct 2 floor house , howmuch loan amount we can get ? I understood the loan eligibility net salary multiplied by 60. But is there any restriction to get the loan based on the site also? Suppose if we go as co applicant is it eligible loan amount as ( my salary 60000/- & my wife salary 35000/- ) 60000*60 +35000*60= 5700000/-. ?
    Q.No.3. to construct the house can bank provide at a time loan amount or is there any stages to get the approved amount?
    Kindly provide me your valuable answer.

    Thanks!!

  • Hi Jaya Pratap,
    1. Bank will only consider the amount that you do the site registry for. For example, if you only show government rate i.e. 25L on registry papers, they will ONLY give 80% of 15 lakh as loan. It would be 20 Lakh.
    2. You can use this 20 Lakh as a payment in Cheque.
    3. Rest 30 Lakh has to be arranged from your own pocket.
    4. Bank will never pay your the cash or cheque in your OWN name. It will be paid directly to the seller (on his name) that’s written on registry papers by CHEQUE ONLY. Also, bank will give this cheque on the day of registry completion on your name.

  • Hi Hrushi,
    1. You can get 80% of the total price of property (Sale price of property + government stamp duty). Make sure that you have 20 Lakh written on sale deed. Normally, people just write the minimum amount on registry papers to avoid stamp duty. If this amount (that you write on registry papers) is less than 20 lakh, then, bank will ONLY consider this amount on paper.
    2. Loan eligibility is calculation multiplied by 60 is correct for the maximum amount that you (as a family) are eligible for.
    BUT, bank cannot pay you more than 80% of total purchase price of property either. So, 80% of 15 lakh is 12 Lakh, which is less than your eligibility (57 Lakh). Bank will have no issue in giving you 12 lakh as loan.

    Please note that bank also do their own site evaluation for the price.
    If their property analyst finds that the value is only 14 lakh, then they will pay 80% 14 lakh only.
    3. Bank’s these days give loan based on construction stages. They try to avoid giving full amount at starting to avoid fraud.

  • Mahesh

    Hi Anil, I am planning to buy a 3BHK flat. Builder quoted the rate as 60 lakh, all inclusive (stamp duty, registration charges etc). How much loan I can get for this property. My monthly take away salary is 120000.

  • Your maximum eligibility is 7200000.
    But, bank can only finance upto 80% of the registered price of the property.
    So, if you are going to pay full 60 lakh on paper, then bank can finance upto 48 Lakhs.

    Also, note that bank will deduct these amount from your monthly take home of 1,20,000 if not already done by you to find your total loan eligibilty:
    1. credit card’s minimum payment amount,
    2. your monthly rent (if any) in case of under-construction property,
    3. car EMI
    4. Your medical salary component
    5. Your LTA component.

  • Hrushi

    Hi Anil,

    Thanks for the clarification

  • You are welcome.

  • Siva Prasad.P

    My name is Siva Prasad,working in Sleek International Pvt Ltd By Asian Paints As Manger and i am getting by 48k monthly ……. i need looking 8 to 10 lakh for loan .so can pls pls suggest what is the possibility

  • You should be able to get it easily. Check with any bank and you should get a positive response if your credit history is good.