Loan Eligibility Calculator

What loan eligibility depends on

Before a lender looks at the size of the loan, it looks at the size of the EMI you can carry. A common way to judge that is FOIR, the fixed obligation to income ratio: the share of your monthly take-home pay that may go towards all your EMIs together, the new one included. Whatever is left after your existing EMIs is the most the new EMI can be, and the loan amount is simply the sum that EMI would repay at the lender's rate over the tenure. This calculator follows that logic with numbers you choose, so you can see your likely range before you apply.

How to use it

1. Enter your net monthly income, the amount that actually reaches your bank account after tax and deductions.
2. Enter the total of the EMIs you already pay on other loans. Credit card dues paid in full each month do not belong here, but card EMIs do.
3. Set the FOIR. It starts at 50%, a round middle figure for illustration, not any lender's rule.
4. Enter the interest rate and tenure you expect to be offered.

The formula

First, Largest EMI = Net monthly income x FOIR / 100 - Existing EMIs, and never below zero. Then the loan that EMI repays is the present value of the EMIs: Loan = EMI x (1 - (1 + r)^-n) / r, where r is the yearly rate divided by 1,200 and n is the tenure in months. This is the standard EMI formula turned around, so a loan of the amount shown, at the rate and tenure shown, has exactly the EMI shown.

A worked example

Suppose you take home ₹80,000 a month and already pay a ₹10,000 EMI on a car loan. At a FOIR of 50%, all your EMIs together may come to ₹40,000, so the new EMI can be up to ₹30,000. At 9% for 20 years (240 months) that EMI repays a loan of about ₹33,34,349. Over the full tenure you would pay ₹72,00,000 in EMIs, so ₹38,65,651 of it is interest. The table under the chart keeps the EMI at ₹30,000 and changes only the tenure: ₹14,45,201 over 5 years, ₹23,68,251 over 10, and ₹37,28,456 over 30. Notice how little the loan grows after 20 years while the interest keeps rising.

Why lenders differ

There is no single FOIR. Each lender sets its own, and it may vary with things like income level, the type of loan and whether there is a co-applicant. Lenders may also weigh your age, the value of a property you are buying and your credit history. That is why two lenders can quote very different amounts for the same salary. Try a few FOIR values here, for example 40%, 50% and 60%, to see the spread.

Ways to raise your eligibility

• Close or prepay a small existing loan, so its EMI no longer counts.
• Choose a longer tenure, which lowers the EMI for the same loan, though it raises total interest.
• Add an earning co-applicant whose income the lender will count.

Limits

This is an estimate, not an offer or an approval. It does not check your credit score, the property value or any lender's own policy, and it assumes a fixed rate for the whole tenure.