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How do banks decide how much loan I can get?
Before approving a loan, a bank checks how much of your monthly income already goes towards EMIs and how much more you can safely pay. This limit is called FOIR (Fixed Obligation to Income Ratio): the share of your net monthly income that all your EMIs together may take. Most banks allow 40–60%, with higher limits for higher incomes.
Whatever is left under that limit, after your existing EMIs, is the largest new EMI the bank will allow. The loan amount is then the loan that this EMI can repay at the bank's interest rate over the tenure you choose.
How is loan eligibility calculated?
- Maximum new EMI = Net monthly income × FOIR − Existing EMIs
- Loan amount = EMI × (1 − (1 + r)−n) ÷ r
Here:
- r = monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = tenure in months
The second formula is the usual EMI formula worked backwards: instead of finding the EMI for a loan, it finds the loan for an EMI.
Examples: how much home loan on my salary?
At 50% FOIR, 8.5% interest, 20 years and no other EMIs:
| Net monthly income | Maximum EMI | Loan you may get | Total interest |
|---|---|---|---|
| ₹30,000 | ₹15,000 | ₹17,28,463 | ₹18,71,537 |
| ₹50,000 | ₹25,000 | ₹28,80,771 | ₹31,19,229 |
| ₹75,000 | ₹37,500 | ₹43,21,156 | ₹46,78,844 |
| ₹1,00,000 | ₹50,000 | ₹57,61,542 | ₹62,38,458 |
Existing EMIs cut into this directly. On a ₹50,000 income, a ₹10,000 car loan EMI leaves room for a ₹15,000 EMI, and the eligible home loan drops from ₹28.8 lakh to ₹17.3 lakh.
How tenure and interest rate change eligibility
For an EMI of ₹25,000:
| Tenure (at 8.5%) | Loan you may get |
|---|---|
| 10 years | ₹20,16,362 |
| 15 years | ₹25,38,742 |
| 20 years | ₹28,80,771 |
| 25 years | ₹31,04,714 |
| 30 years | ₹32,51,341 |
| Interest rate (20 years) | Loan you may get |
|---|---|
| 8% | ₹29,88,857 |
| 9% | ₹27,78,624 |
| 10% | ₹25,90,615 |
| 11% | ₹24,22,038 |
A longer tenure raises eligibility, but by less each time, while the total interest keeps climbing. Banks also cap the tenure by your age, usually so that the loan ends by retirement (around 60–65 for salaried people).
Tips to get a bigger loan
- Close small loans first. Paying off a two-wheeler or consumer loan frees its whole EMI for the new loan.
- Clear credit card dues. Banks count a part of your outstanding card balance as an EMI.
- Add a co-applicant. An earning spouse or parent adds their income, so the combined EMI limit goes up.
- Keep a good credit score. A score above 750 gets better rates, and a lower rate means a bigger loan for the same EMI.
- Remember the down payment. For a home loan, banks lend up to 75–90% of the property value, depending on the loan size; you pay the rest yourself.
This calculator gives an estimate. The bank's final amount also depends on your credit score, age, job stability, employer and, for a home loan, the property value.
Frequently asked questions
What is FOIR?
FOIR (Fixed Obligation to Income Ratio) is the share of your net monthly income that the bank lets all your EMIs take together. At 50% FOIR on a ₹60,000 income, all EMIs together can be up to ₹30,000.
Should I enter gross salary or take-home salary?
Enter your net (take-home) monthly salary, after tax, PF and other deductions. Most banks work from this figure. If you are self-employed, use your average monthly income from your income tax returns.
Which loans count as existing EMIs?
Every running loan: home, car, two-wheeler, personal, education, gold and consumer durable loans, plus "no cost EMI" purchases. Monthly expenses like rent, school fees and SIPs are not counted as EMIs, though the bank may still ask about them.
Can I use this for a personal loan or car loan?
Yes. The method is the same; just enter the rate and tenure of that loan. For example, on a ₹40,000 income with a ₹5,000 existing EMI, a 5-year personal loan at 11% gives about ₹6.9 lakh at 50% FOIR.
Is the information I enter saved anywhere?
No. The calculation happens entirely in your browser. Nothing you enter is sent to our server or stored.