One of the most preferred unsecured loan options for any form of personal necessity is a personal loan. A personal loan is a multipurpose loan that can address a wide range of financial needs. Be it a medical emergency, a large purchase, or covering any modest expenses. Salary loans, online loans, and instant loans are all forms of personal loans.

A salary loan is a loan offered to a salaried individual. Usually, the lender offers a loan up to 10 times the salary based on the borrower’s credit history. It is a short-term loan which the borrower has to repay within 3 to 6 months. While an online loan is available for both salaried and non-salaried individuals. The loan amount can vary depending on your eligibility and the tenure is usually 12 to 60 months. Many banks, NBFCs and fintech companies offer these online loans with easy terms and high affordability.

Though availing these loans has become increasingly easy today, you still have to meet certain criteria set by the lender. For example, your income and employment stability play a crucial role in loan approval.

Your income, employment status, work history, and employer profile are often considered when determining loan eligibility. Even if you are a borrower with a high CIBIL score, many lenders will consider your salary, employment situation, and work history into account. Based on this, they decide if you have the resources necessary to repay the loan on time. 

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Role of Income and Employment Stability in Approval of Personal Loan

All lenders consider your income and job stability as primary factors while determining your loan eligibility. Though the minimum income required cited by most lenders is Rs. 15,000, the simple fact is, the higher your income, the higher your loan eligibility. 

Your employer also plays a role in your loan eligibility. Not all salaried persons are eligible for a salary loan. Most lenders offer salary loans to individuals working with reputed government or private organizations.

Lenders will easily approve your salary loan request if you work at a high-net-worth company and have solid work experience. Government employees and employees working in MNCs have higher chances of loan approval than someone working at a start-up.

The Impact of Employment Status on the Approval of Personal Loans

Personal loans are unsecured finances, which puts the lender at high risk of losing their money in case you default. That’s why the lender considers several factors before approving your loan application. Your employment history and job stability are the two most important factors that every lender considers while determining your loan eligibility. 

Despite having a solid credit score, your online loan application may get rejected based on:

  1. Monthly Salary

Your salary is the most important factor that determines our repayment capability. Typically, most lenders mention a minimum salary requirement of Rs. 15,000. But the higher the salary, the higher could be the loan amount. Most lenders can offer a salary loan of up to 10 times your monthly salary.

  1. Length of Employment

Another eligibility criterion for personal loan approval is the length of your employment. Most lenders require a work experience of minimum 2 years, with 6 months of experience at your current job. However, the longer you are at your current job, the better your loan approval. The interval between jobs can also affect your eligibility for a personal loan. 

  1. Work Profile

Your work profile or designation also affects your online loan eligibility. For instance, permanent employees have a higher probability of getting a loan than temporary employees, people with contract jobs, freelancers or those on probation.

  1. Salary Credit

Lenders require evidence of your income. Cash salaries are, therefore, typically not accepted because there is no evidence of salary credit in any bank account or statement. For instance, when applying for a salary loan, the lender will consider your profile if you receive a regular salary credit into your bank account.  

  1. Employer’s Profile

High-worth companies are ranked higher in a lender’s profile than startups and SMEs. This is due to the employer’s positive industry reputation. It has a substantial workforce and strong financials. As a result, they offer better job security and on-time salary.


When it comes to your online loan application, your employment status, income, and work experience are crucial. Since personal loans are unsecured forms of lending, lenders strongly consider your ability to repay the loan before approving the loan amount. 

The amount you qualify for from the lender depends on various factors, including age, credit score, income, employment and current debts. Lenders consider all these factors while approving an online loan application or a salary loan application. In the case of online loans, you can also mention other sources of income like rental income or income from investments. But for salary loans, your salary and employment stability are the two most crucial parameters.