How is loan eligibility calculated?

Banks use FOIR (Fixed Obligations to Income Ratio). Max EMI = Monthly Income × FOIR − Existing EMIs. Then loan amount = EMI × ((1+r)^n − 1) / (r×(1+r)^n).

What is FOIR in loan eligibility?

FOIR is the percentage of your income that banks allow for loan repayments. Typically 40–50% for personal loans and 50–60% for home loans.

🏦 Check Eligibility

Loan Eligibility Calculator

Find out how much loan you can get based on your monthly income, existing EMIs, interest rate and tenure.

Your financial profile

Monthly income (₹)

₹

Existing EMIs (₹)

₹

Car loan, personal loan EMIs etc.

FOIR ratio

Banks allow 40-50% for personal loans, 50-60% for home loans

Interest rate

% p.a.

Loan tenure

years

Loan type (preset FOIR)

Maximum Loan Amount—

—Max EMI per month

—Estimated EMI

—Total interest

—Income left after EMI

How loan eligibility is calculated

Banks use the FOIR (Fixed Obligations to Income Ratio) method to determine how much loan you can afford. They first calculate the maximum EMI you can pay: Max EMI = (Monthly Income × FOIR%) − Existing EMIs. Then, using the loan tenure and interest rate, they work backwards to find the maximum loan amount you qualify for.

📊 What is FOIR?

FOIR is the percentage of your monthly income that banks allow for loan repayments. For personal loans it's typically 40–50%, for home loans 50–60% (since home loans are secured). A higher FOIR means a larger loan amount but leaves less room for other expenses.

💳 Factors that affect eligibility

Your credit score (CIBIL), employment stability, existing debts, age, and loan tenure all influence the final loan amount. A higher credit score (>750) often gets better interest rates and higher eligibility.

🏠 Home loan vs personal loan

Home loans have longer tenures (up to 30 years) and lower interest rates, so eligibility is higher for the same income. Personal loans have shorter tenures (max 5‑7 years) and higher interest rates, reducing the eligible amount.

📉 Reducing EMI vs reducing principal?

This calculator assumes a standard reducing‑balance EMI (most common in India). If you prepay, the total interest decreases, and your eligibility for future loans increases because your outstanding debt reduces.

Frequently asked questions

Can I get a loan without any existing income?

Most banks require a regular source of income. Some offer loans against collateral (fixed deposits, gold, property) even without monthly income, but unsecured loans (personal loans) almost always require income proof.

How does my CIBIL score affect eligibility?

A CIBIL score above 750 greatly improves your chances and may even increase eligible loan amount (as banks trust you more). Scores below 650 often lead to rejection or require a co‑applicant. This calculator assumes an average credit profile.

Does the calculator include other fixed obligations?

You should manually add any fixed monthly obligations (credit card minimum payments, other loan EMIs, rent if it's very high) in the "Existing EMIs" field. This ensures a more accurate eligibility estimate.

Is the result guaranteed?

No. This is an estimate based on standard banking formulas. Actual approval depends on the bank’s internal policies, your credit history, property valuation (for home loans), and other factors. Always consult with a bank before making financial decisions.