Loan Affordability: How Much Can You Safely Borrow?
The 40% FOIR Rule Banks Use
Banks use the Fixed Obligation to Income Ratio (FOIR) to determine your maximum EMI. Most banks cap total EMI obligations (all loans + credit cards) at 40–50% of your net monthly income. Exceeding this means automatic rejection, regardless of your CIBIL score.
Maximum Loan by Income
| Monthly Income | Max EMI (40% FOIR) | Existing EMIs | Available for New Loan | Max Home Loan (8.5%, 20yr) |
|---|---|---|---|---|
| ₹50,000 | ₹20,000 | ₹5,000 | ₹15,000 | ₹17.3L |
| ₹75,000 | ₹30,000 | ₹5,000 | ₹25,000 | ₹28.8L |
| ₹1,00,000 | ₹40,000 | ₹10,000 | ₹30,000 | ₹34.6L |
| ₹1,50,000 | ₹60,000 | ₹10,000 | ₹50,000 | ₹57.6L |
How to Increase Your Loan Eligibility
- Close existing loans/cards: Every ₹5K EMI freed up adds ₹5–6L to home loan eligibility
- Add co-applicant: Spouse’s income gets added, increasing eligible amount
- Choose longer tenure: 30-year tenure vs 20-year increases eligibility by ~25%
- Improve CIBIL score: 750+ gets you better rates, which increases eligible amount at same EMI
Check your maximum borrowing capacity with the loan affordability calculator. Compare specific loan offers with the loan comparison tool.