Perks-heavy salary? Loan or cards could be out of reach

Banks don't treat all parts of CTC equally—a salary low on fixed pay can hurt your eligibility

- Anil Poste

Imagine this: you and your friend go to the same bank branch to apply for a home loan. Both of you have a cost-to-company (CTC) package of ₹15 lakh. To your surprise, your friend is offered a home loan of ₹75 lakh, while your eligibility caps out at ₹60 lakh. You're confused. After all, your CTCs are the same.

So, what went wrong?

Well, your friend's salary probably has a higher share of fixed income components, while yours maybe packed with reimbursements and variables. This seemingly minor detail may make a major difference on your eligibility for a loan or a credit card.

How does this work?

While the two CTCs may be identical on paper, lenders don't treat all components equally. Reimbursements such as fuel, mobile bills, meal coupons, or travel expenses are included in your CTC, but these are conditional, variable, and often non-recurring.

As a result, lenders typically exclude these components when calculating your actual income for evaluating a loan or credit card application.

Firoz Hasnain, chief general manager—MSME & retail, Punjab National Bank (PNB), said, "The regularity of income of the borrower(s) should be clearly established before sanction of loan. Reimbursement, being variable, is excluded from this assessment."