1. What is the Credit Limit Formula?

The credit limit formula estimates the maximum credit card limit based on mobile-verified income and a predetermined factor. This calculation is specifically designed for mobile-based banking in Pakistan.

2. How Does the Calculator Work?

The calculator uses the credit limit formula:

Where:

• \( \text{mobile-verified income} \) — Annual income verified through mobile banking (PKR/year)
• \( \text{factor} \) — Bank-determined multiplier (typically between 0.1-0.3)

Explanation: The formula provides a simple way for banks to determine credit limits based on verified income and risk assessment.

3. Importance of Credit Limit Calculation

Details: Accurate credit limit estimation helps maintain financial stability for both banks and customers, preventing over-indebtedness while providing adequate credit access.

4. Using the Calculator

Tips: Enter your mobile-verified annual income in PKR and the factor provided by your bank. The default factor is 0.2 (20%) if you're unsure.

5. Frequently Asked Questions (FAQ)

Q1: What is mobile-verified income?
A: Income verified through mobile banking platforms in Pakistan, typically using digital financial records.

Q2: How is the factor determined?
A: Banks set factors based on risk assessment, customer profile, and internal policies (usually 10-30% of income).

Q3: Can I get a higher limit than calculated?
A: Some banks may offer higher limits with additional documentation or for premium customers.

Q4: Does this apply to all Pakistani banks?
A: Most mobile banking services in Pakistan use similar calculations, but policies may vary between institutions.

Q5: How often is credit limit recalculated?
A: Typically annually, or when you request a review with updated income information.