Loan Eligibility Calculator
Loan eligibility is evaluated by financial institutions using the Fixed Obligation to Income Ratio (FOIR). Most Indian banks cap your total active monthly liabilities (existing EMIs + proposed EMI) at 50% of your net take-home salary.
Input Calculation Parameters
Calculation Results
How the Calculation Works
Available EMI capacity = (Net Monthly Salary x FOIR Ratio) - Existing EMIs. Maximum loan eligibility is the present value of that monthly capacity over the desired tenure.
Worked Example
Here is a step-by-step example calculation for ₹1 Lakh Monthly Income with ₹15k Active EMI @ 8.5% for 20 Yrs:
| Parameter | Value |
|---|---|
| Income | ₹1,00,000 |
| Existing Emi | ₹15,000 |
| Max Additional Emi | ₹35,000 |
| Max Loan Eligibility | ₹40,33,088 |
Scenario Analysis
Comparing different tenures, interest rates, or investment horizons:
| Scenario Label | Key Metric |
|---|---|
| Zero Existing EMI | Max Emi: ₹50,000, Max Loan: ₹57,61,555 |
| ₹15,000 Existing EMI | Max Emi: ₹35,000, Max Loan: ₹40,33,088 |
| ₹30,000 Existing EMI | Max Emi: ₹20,000, Max Loan: ₹23,04,622 |
Common Mistakes to Avoid
- Not factoring in co-applicant income (spouse/parents) which can substantially boost eligibility.
- Applying to multiple banks simultaneously, which triggers hard CIBIL inquiries and reduces credit score.
Frequently Asked Questions (FAQs)
What is FOIR in loan processing?
FOIR stands for Fixed Obligation to Income Ratio. It is the percentage of your monthly income committed to paying EMIs and credit obligations.
Authoritative Sources & Regulatory References
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