For a monthly salary of ₹30,000, financial experts recommend maintaining personal loan EMIs between ₹6,000 to ₹7,500 as the safe and sustainable range. According to Manish Shara, Co-founder and CEO of ZET, this corresponds to 20-25% of monthly income, which provides adequate room for everyday expenses and income fluctuations while maintaining financial stability. The analysis assumes stable income and no other existing debts, with actual affordability depending on individual expenses, liabilities, and financial circumstances.
Banking institutions and NBFCs use the Fixed Obligation to Income Ratio (FOIR) to assess repayment capacity, approving EMIs up to 40-50% of monthly income. However, as reported by Mint, this represents the higher lending limit rather than a financially safe zone. Shara explains that many borrowers assume loan eligibility equals comfortable affordability, but this gap often creates repayment stress. Operating at the maximum FOIR level leaves minimal room for essential expenses and income fluctuations.
Missing even a single EMI payment has significant long-term consequences beyond late fees, as reported by Mint. These missed payments are reported to credit bureaus and can negatively affect credit scores for years, making future credit access more difficult and expensive. Shara emphasizes that even a few missed payments can undo years of disciplined credit behavior, making consistent EMI management crucial for maintaining financial stability and creditworthiness. A CIBIL score of 700 or above is generally considered good, with higher scores enabling borrowers to negotiate lower interest rates with lenders.
Financial experts recommend prioritizing no debt obligations as fundamental to sensible personal finance planning. According to the analysis, the primary goal should be maintaining no EMI obligations at all, with total EMI outgo never exceeding 20-25% of monthly income if debt is indispensable. Mint advises that final decisions on loan amounts, interest rates, and EMIs should be made only after proper understanding of fundamentals and consultation with certified advisors to ensure borrowing remains a pleasant experience without forcing additional debt. Interest rates typically start from around 10% per annum for personal loans, depending on credit profile, loan amount, and lender.
