Loan Eligibility Calculator: How Much Loan Can You Get?
Banks Use FOIR, Not Your Salary, to Decide Your Loan
When you apply for a home loan, car loan, or personal loan, the bank doesn’t simply multiply your salary by a factor. They use a metric called FOIR (Fixed Obligation to Income Ratio) — the percentage of your monthly income that goes toward EMIs and other fixed obligations. Most banks cap FOIR at 40–60%, depending on your income level and the loan type.
The Eligibility Formula Banks Use
Maximum EMI you can afford = (Monthly income × Maximum FOIR) – Existing EMIs
From this EMI limit, the bank reverse-calculates the maximum loan amount based on interest rate and tenure.
Worked Example
- Monthly in-hand salary: ₹1,00,000
- Maximum FOIR: 50%
- Max total EMIs: ₹50,000
- Existing car loan EMI: ₹12,000
- Available for new loan EMI: ₹38,000
- At 8.5% for 20 years: maximum home loan = approximately ₹44.7 lakh
Factors That Affect Your Eligibility
| Factor | Impact | How to Improve |
|---|---|---|
| CIBIL Score | Below 650: most banks reject. 750+: best rates. | Pay credit card bills on time; keep utilization below 30% |
| Monthly Income | Higher income = higher eligible amount | Include spouse income as co-borrower |
| Existing EMIs | Reduce available FOIR margin | Close smaller loans before applying |
| Age | Determines max tenure (loan must end before retirement) | Apply earlier for longer tenure options |
| Employment Type | Salaried preferred over self-employed | If self-employed, show 3 years of stable ITR |
Income Multiplier Rule of Thumb
- Home loan: 5–6× annual income (with no other EMIs)
- Car loan: 2–3× annual income
- Personal loan: 8–12× monthly salary
These are rough guidelines. Use the loan eligibility calculator for an accurate estimate based on your specific income, existing obligations, and desired tenure.
How to Maximize Your Loan Eligibility
- Close credit card dues: Even minimum payments count as obligations in FOIR
- Add a co-borrower: Spouse or parent income gets added to your eligibility
- Choose longer tenure: Reduces EMI, increasing the loan amount you qualify for (but increases total interest)
- Improve CIBIL: A 750+ score unlocks better rates, which means higher eligible amount for the same EMI
- Show all income: Include bonuses, rental income, and side income with documentation