Financial Profile
Eligible Loan Amount
₹0Max EMI Allowed
₹0
Total Interest
₹0
Note: This is an estimate based on FOIR norms. Actual bank eligibility depends on your credit score and stability.
What is Loan Eligibility?
Loan eligibility is the maximum borrowing limit a bank or lender will grant you. Banks calculate this by examining your monthly take-home salary, credit score, and existing loan liabilities (known as your Fixed Obligation to Income Ratio or FOIR).
Before submitting credit applications, verify your safe debt limit on our debt-to-income ratio calculator and test overall borrowing affordability on our loan affordability calculator. If you are financing a property purchase, calculate your installments on our home loan EMI calculator, check unsecured financing with our personal loan calculator, and ensure your lender quotes a reducing balance rate using our flat vs reducing interest tool.
FOIR: How Banks Calculate Eligibility
Banks in India use a metric called FOIR (Fixed Obligation to Income Ratio) to determine your capacity to pay EMIs. It represents the percentage of your income that can go toward debt repayment.
1. Salaried Professionals (60% FOIR)
Banks usually assume that salaried individuals have a predictable income. Therefore, they allow up to 60% of the net salary to be used for all combined EMIs. If your salary is ₹1 Lakh, your total EMIs (new + existing) cannot exceed ₹60,000.
2. Self-Employed / Business (50% FOIR)
Business income can be volatile. Consequently, banks apply a more conservative 50% FOIR for self-employed individuals to account for business fluctuations and operating costs. This ensures the borrower remains financially stable.
Formula Used
The "EMI per Rupee" is calculated using the standard amortized loan formula for ₹1 based on the selected interest rate and tenure.
Tips to Increase Your Loan Eligibility
Add a Co-Applicant
Combining income with a spouse or parent significantly increases the total eligibility as the bank considers the household income.
Clear Short-term Debts
Closing small credit card dues or personal loans reduces your "Existing EMIs," freeing up more of your income for the bank's assessment.
Limitations of this Calculator
- Credit Score Ignored: This calculator assumes you have an excellent credit score (750+). A low CIBIL score will drastically reduce eligibility or result in rejection regardless of income.
- Bank-Specific FOIR Policies: While 60% and 50% FOIR are standard rules of thumb, different banks have different slabs. A person earning ₹2 Lakh/month might be allowed a 70% FOIR, while someone earning ₹30,000 might be restricted to 50%.
Common Mistakes
- Hiding Existing EMIs: Failing to account for small personal loans or "Buy Now Pay Later" schemes. Banks will see these on your credit report and adjust eligibility accordingly.
- Maxing out Eligibility: Borrowing exactly what the bank offers leaves no room for emergencies or interest rate hikes in floating-rate loans. Always borrow less than the maximum allowed.
Credit Score (CIBIL) Impact on Loan Eligibility & Interest Spreads
| CIBIL Score Band | Eligibility Probability | Interest Rate Spread | Loan-to-Value (LTV) Cap |
|---|---|---|---|
| 750 - 900 (Excellent) | Instant Approval (95%+) | Lowest Benchmark Rate (EBLR + 0%) | Up to 80% - 90% of property cost |
| 700 - 749 (Good) | Standard Processing (80%) | + 25 to 50 bps spread | 75% - 80% LTV |
| 650 - 699 (Fair) | Conditional / Co-applicant Required | + 75 to 150 bps risk premium | 65% - 70% LTV |
| Below 650 (Poor) | High Rejection Risk (<25%) | NBFC rates only (14%+ p.a.) | Strictly collateral-backed only |