Loan Eligibility Calculator

What decides your loan eligibility?

Lenders decide how much to lend by looking at how large an EMI you can afford. They allow your total EMIs — existing loans plus the new one — to take up only a fixed share of your net monthly income, called the FOIR (fixed obligations to income ratio). The largest loan whose EMI fits in that space, at the lender’s rate and tenure, is your income-based eligibility. For a home loan, RBI’s loan-to-value limit on the property can cap it further.

This loan eligibility calculator applies both tests: it finds the loan your income supports after existing EMIs, compares it with the property-based cap, and shows the maximum EMI, total interest and the down payment you would need.

How this calculator works

Lenders do not ask what you want to borrow; they work out what you can repay. The calculation starts from your net income, applies a FOIR — the share of income they will let go towards all loan instalments combined — and subtracts what you already pay each month. Whatever EMI capacity remains is then converted into a loan amount.

That conversion is the present value of an annuity: given an EMI you can afford, an interest rate and a tenure, how much principal does that stream of payments support? Longer tenures and lower rates both increase it.

For a secured loan there is a second cap. The RBI limits the loan-to-value ratio on home loans, so the bank will not lend more than 75–90% of the property value regardless of your income. Your sanction is the lower of the two limits — which is what the chart above shows.

Raising the tenure is the easiest way to qualify for more, but it is not free: a 30-year loan qualifies you for roughly 15% more than a 20-year one while costing dramatically more in total interest.

Formula

Max EMI        = (income × FOIR) − existing EMIs

                 EMI × [1 − (1 + r)^−n]
Loan by income = ──────────────────────
                          r

Loan by LTV    = property value × LTV%
Sanctioned     = lower of the two

r = annual rate ÷ 12      n = tenure in months

Worked example

₹1,00,000 monthly net income, no existing EMIs, 50% FOIR.
Max EMI = ₹50,000. At 8.75% over 20 years that supports a loan of about ₹56.5 lakh.
On an ₹80 lakh property with 80% LTV, the property cap is ₹64 lakh — so income is the binding constraint and ₹56.5 lakh is sanctioned.

Eligible loan by take-home income

50% FOIR, no existing EMIs, 8.75% for 20 years
Net monthly income	Maximum EMI	Eligible loan
₹50,000	₹25,000	₹28,28,980
₹75,000	₹37,500	₹42,43,470
₹1,00,000	₹50,000	₹56,57,960
₹1,50,000	₹75,000	₹84,86,940
₹2,00,000	₹1,00,000	₹1,13,15,920

Every ₹10,000 of existing EMIs reduces a home loan eligibility like this by about ₹11.3 lakh, which is why closing small loans before applying helps.

Eligibility for other kinds of loans

Personal loans: lenders apply a FOIR too, often capping the loan at a multiple of monthly income, and weigh your credit score and employer heavily.
Car loans: the loan is usually limited to a share of the car’s on-road or ex-showroom price, as well as by FOIR.
Education loans: the student’s future earning potential, the course and institution, and the co-borrower’s income matter more than current income.
Loan against property: typically capped at 50%–70% of the property’s market value.

Assumptions & important notes

What this calculator assumes

FOIR is applied to net take-home income. Some lenders work from gross income instead, which produces a higher figure.
Only documented, verifiable income counts. Cash income you cannot evidence will not be considered.
Credit score is not modelled. A score below roughly 700 can reduce the FOIR allowed or raise the rate offered.
Processing fees, insurance and stamp duty are not included in the loan amount and are usually paid separately.

Important notes

Adding a co-applicant with income is the most effective way to increase eligibility, because their income is added while the FOIR stays the same.
Clearing a small personal loan or car loan before applying can raise your eligibility by several lakh, since existing EMIs come straight off your capacity.
Loan-to-value caps set by the RBI: 90% for loans up to ₹30 lakh, 80% from ₹30–75 lakh, and 75% above ₹75 lakh.
Stamp duty and registration cannot be included in the LTV calculation and must be funded from your own money.

Frequently asked questions

What is FOIR and why does it matter?

Fixed obligation to income ratio — the maximum share of your income a lender will allow to go towards all EMIs together. Most banks use 40–55%, going higher for larger incomes because more is left over in absolute terms after essentials.

How can I increase my loan eligibility?

Add an earning co-applicant, close existing small loans, extend the tenure, or improve your credit score to negotiate a lower rate. Adding a co-applicant usually has the largest effect.

Why is my sanctioned amount lower than what I calculated?

Lenders apply their own income multiples, may not count variable pay or rental income in full, and will reduce the offer for a weak credit history. Treat this figure as an upper estimate of what to expect.

Does a longer tenure really help?

It increases the amount you qualify for, because the same EMI supports more principal. But the extra interest is substantial — always check the total interest figure before choosing a longer tenure purely to qualify.

Does my credit score affect how much I can borrow?

Indirectly, yes. A strong score gets a lower interest rate, which raises the loan a given EMI can support, and makes lenders more willing to use a higher FOIR. A weak score can mean rejection or a smaller sanction.

Can rental income or bonuses be counted?

Often, partly. Lenders usually count a share of documented rental income and average variable pay over two to three years. Enter those as other income in the calculator for a rough estimate.

New loan EMI	₹50,000	50.0%
Free income	₹50,000	50.0%

About the Loan Eligibility Calculator