What Is Loan Affordability?
Loan affordability is the largest loan you can repay from your income without falling behind, given your other EMIs, the interest rate and the tenure. It is worked backwards from the EMI your income can carry.
Two numbers matter. The lender maximum is the most a lender will approve under its own income rules. The comfortable amount is what you can repay while still covering rent, family costs and savings.
Most borrowers only see the first number, because that is what a lender quotes. This calculator shows both, so you can decide how much of the lender's offer to actually take.
Affordability is not the same as approval. A lender also checks your credit history, job or business stability and, for a home loan, the property itself. Use the Loan Eligibility Calculator for a lender-style eligibility check.
How Lenders Decide How Much You Can Borrow
Lenders size a loan from five inputs, and income is only the first of them.
- Income: regular monthly income, assessed from salary slips and bank statements, or from income tax returns if you are self-employed.
- Existing EMIs: every EMI you already pay comes out of the same income before the new loan is sized.
- FOIR limit: the share of income a lender allows for all EMIs together, set in its own credit policy.
- Rate and tenure: together these decide how much loan each rupee of EMI can repay.
- Age: lenders usually want the loan repaid by a set age, which caps the tenure for older borrowers.
For a home loan there is a sixth limit: the loan cannot exceed RBI's loan-to-value ceiling for the property, whatever your income supports.
Loan Affordability Formula
The maximum loan is found in two steps: first the EMI your income can carry, then the loan that EMI repays.
Available EMI = Monthly income × FOIR limit − Existing EMIs
Maximum loan = EMI × [(1 + r)^n − 1] ÷ [r × (1 + r)^n]
r = annual rate ÷ 12 ÷ 100, n = tenure in monthsWorked example
Take a Rs 60,000 monthly income, a Rs 5,000 EMI on an existing car loan, a 50% FOIR limit, and a home loan at 8.5% for 20 years.
- EMI limit: 50% of Rs 60,000 is Rs 30,000.
- Available for the new loan: Rs 30,000 − Rs 5,000 = Rs 25,000.
- Loan factor: r = 0.0070833, n = 240, (1 + r)^240 = 5.441243, so each Rs 1 of EMI supports Rs 115.23 of loan.
- Maximum loan: Rs 25,000 × 115.23 = about Rs 28.81 lakh.
Over 20 years that loan costs Rs 60 lakh in total repayments, of which Rs 31.19 lakh is interest. The loan is 4.0 times the borrower's annual income.
How Much Loan Can I Get on My Salary?
At a 50% FOIR limit with no other EMIs, half of your monthly income becomes the EMI budget. The table converts that budget into the maximum home, personal and car loan.
| Monthly Income | EMI Budget | Home Loan | Personal Loan | Car Loan |
|---|---|---|---|---|
| Rs 25,000 | Rs 12,500 | Rs 14.40 L | Rs 5.62 L | Rs 6.02 L |
| Rs 30,000 | Rs 15,000 | Rs 17.28 L | Rs 6.74 L | Rs 7.23 L |
| Rs 40,000 | Rs 20,000 | Rs 23.05 L | Rs 8.99 L | Rs 9.63 L |
| Rs 50,000 | Rs 25,000 | Rs 28.81 L | Rs 11.24 L | Rs 12.04 L |
| Rs 60,000 | Rs 30,000 | Rs 34.57 L | Rs 13.49 L | Rs 14.45 L |
| Rs 75,000 | Rs 37,500 | Rs 43.21 L | Rs 16.86 L | Rs 18.07 L |
| Rs 1,00,000 | Rs 50,000 | Rs 57.62 L | Rs 22.48 L | Rs 24.09 L |
The same EMI budget supports far less on a personal or car loan because the tenure is a quarter as long and the rate is higher. On a personal loan, lenders also apply their own maximum loan amounts, so treat these as ceilings.
For a personal loan on a Rs 60,000 income, the ceiling moves with the tenure: about Rs 9.03 lakh over 3 years, Rs 11.39 lakh over 4 years and Rs 13.49 lakh over 5 years at 12%.
Home Loan and Property Budget by Salary
A home loan is also capped by the property's value. RBI's loan-to-value limits decide the smallest down payment you can make, and the band changes with the loan size.
| Monthly Income | Max Home Loan | LTV Band | Max Property Value | Min Down Payment |
|---|---|---|---|---|
| Rs 20,000 | Rs 11.52 L | 90% | Rs 12.80 L | Rs 1.28 L |
| Rs 30,000 | Rs 17.28 L | 90% | Rs 19.21 L | Rs 1.92 L |
| Rs 40,000 | Rs 23.05 L | 90% | Rs 25.61 L | Rs 2.56 L |
| Rs 50,000 | Rs 28.81 L | 90% | Rs 32.01 L | Rs 3.20 L |
| Rs 60,000 | Rs 34.57 L | 80% | Rs 43.21 L | Rs 8.64 L |
| Rs 75,000 | Rs 43.21 L | 80% | Rs 54.01 L | Rs 10.80 L |
| Rs 1,00,000 | Rs 57.62 L | 80% | Rs 72.02 L | Rs 14.40 L |
| Rs 1,50,000 | Rs 86.42 L | 75% | Rs 1.15 Cr | Rs 28.81 L |
| Rs 2,00,000 | Rs 1.15 Cr | 75% | Rs 1.54 Cr | Rs 38.41 L |
Notice the jump between Rs 50,000 and Rs 60,000. Once the loan crosses Rs 30 lakh, the maximum LTV drops from 90% to 80%, so the minimum down payment more than doubles.
To plan how long it takes to save that down payment, use the Home Down Payment Calculator.
Home Loan Eligibility Calculator
Check your home loan limit with a lender-style eligibility view based on salary and credit score.
Maximum Loan Tenure by Loan Type and Age
The longest tenure you can get depends on the loan type and on your age, because lenders want the loan repaid by a set age.
| Loan Type | Maximum Tenure (SBI) | Age Condition |
|---|---|---|
| Home loan | Up to 30 years | Repaid by age 70 (75 under some schemes) |
| Personal loan (Xpress Credit) | 6 months to 6 years | Within the lender’s age and service rules |
| Car loan, new car | Up to 7 years | Within the lender’s age rules |
| Car loan, used car | Up to 5 years | Within the lender’s age rules |
Age often matters more than the product maximum. If a lender wants the loan closed by 60, a 45-year-old can borrow for 15 years at most. On a Rs 25,000 EMI at 8.5%, that caps the home loan at about Rs 25.39 lakh.
The same borrower with a lender that allows repayment up to 70 could take 25 years and about Rs 31.05 lakh. Set your age and the lender's closing age under More settings to see the effect.
How Tenure Changes How Much You Can Borrow
A longer tenure lets the same EMI repay a bigger loan, but each extra year adds less loan and more interest.
| Tenure | Maximum Loan | Total Interest |
|---|---|---|
| 10 years | Rs 20.16 L | Rs 9.84 L |
| 15 years | Rs 25.39 L | Rs 19.61 L |
| 20 years | Rs 28.81 L | Rs 31.19 L |
| 25 years | Rs 31.05 L | Rs 43.95 L |
| 30 years | Rs 32.51 L | Rs 57.49 L |
Going from 20 to 30 years adds only Rs 3.70 lakh of loan but Rs 26.30 lakh of interest. A longer tenure is best used as a safety margin, paired with prepayments; the Loan Prepayment Calculator shows how much that saves.
How the Interest Rate Changes How Much You Can Borrow
A higher rate means each rupee of EMI covers more interest and less principal, so the maximum loan falls.
| Interest Rate | Maximum Loan |
|---|---|
| 7.5% | Rs 31.03 L |
| 8.0% | Rs 29.89 L |
| 8.5% | Rs 28.81 L |
| 9.0% | Rs 27.79 L |
| 9.5% | Rs 26.82 L |
| 10.0% | Rs 25.91 L |
Each 0.5% of rate moves the maximum loan by roughly Rs 1 lakh here. On a floating-rate loan the rate can also rise after you borrow, which is one reason to leave room below the lender maximum.
How Existing EMIs Reduce Your Borrowing Capacity
Every rupee of existing EMI removes a rupee from the budget for the new loan, and on a long loan that rupee was worth a lot of principal.
| Existing EMIs | EMI Left for New Loan | Maximum Home Loan | Capacity Lost |
|---|---|---|---|
| Nil | Rs 30,000 | Rs 34.57 L | Nil |
| Rs 5,000 | Rs 25,000 | Rs 28.81 L | Rs 5.76 L |
| Rs 10,000 | Rs 20,000 | Rs 23.05 L | Rs 11.52 L |
| Rs 15,000 | Rs 15,000 | Rs 17.28 L | Rs 17.28 L |
A Rs 10,000 car or personal loan EMI costs Rs 11.52 lakh of home loan capacity. If that loan has only a year or two left, closing it before applying can be the single biggest boost to what you can borrow.
FOIR and Debt-to-Income Ratio
FOIR (Fixed Obligation to Income Ratio) is the share of monthly income that goes to all loan EMIs, including the new one. Outside India the same idea is usually called the debt-to-income ratio.
For most retail loans, the FOIR limit is set by each lender's credit policy and can differ by income level, loan type and employment type. This calculator uses 50% by default; change it under More settings to match a lender.
RBI applies a hard cap of this kind to microfinance loans. Under its 2022 microfinance framework, repayments on all loans of a household cannot exceed 50% of monthly household income.
The Debt-to-Income Ratio Calculator shows where your current EMIs already put you.
Home Loan Down Payment and RBI LTV Limits
RBI caps how much of a home's cost a lender can finance, so a home loan always needs a down payment from your own savings.
| Loan Amount | Maximum LTV | Minimum Down Payment |
|---|---|---|
| Up to Rs 30 lakh | 90% | 10% of property cost |
| Above Rs 30 lakh to Rs 75 lakh | 80% | 20% of property cost |
| Above Rs 75 lakh | 75% | 25% of property cost |
The RBI Master Circular also tells banks not to include stamp duty, registration and documentation charges in the property cost they finance. The one exception is a home costing up to Rs 10 lakh.
So the cash you need is the down payment plus stamp duty, registration and other costs. The Home Buying Total Cost Calculator adds all of these up.
Home Buying Total Cost Calculator
Add stamp duty, registration and other costs to your down payment to see the full cash you need.
Lender Maximum vs Comfortable Loan
The lender maximum is a ceiling, not a recommendation. It assumes your income stays the same, the rate never rises and no new big expense appears for 20 years.
| EMI Limit | Monthly EMI | Maximum Loan | Left Each Month |
|---|---|---|---|
| 50% (lender limit) | Rs 30,000 | Rs 34.57 L | Rs 30,000 |
| 40% (comfort limit) | Rs 24,000 | Rs 27.66 L | Rs 36,000 |
Borrowing Rs 6.91 lakh less keeps Rs 6,000 more each month for savings, insurance and emergencies. Set your own comfort limit under More settings; the result panel shows both loans side by side.
A useful test: could you still pay the EMI if the rate rose by 1% and a family expense doubled? If not, the comfortable figure is the one to plan around.
How to Increase How Much You Can Borrow
- Add an earning co-applicant: combined income raises the EMI budget. A co-applicant earning Rs 40,000 lifts a Rs 60,000 earner's 20-year, 8.5% home loan from Rs 34.57 lakh to Rs 57.62 lakh at a 50% limit.
- Close small loans first: clearing an Rs 8,000 EMI on a Rs 50,000 income frees about Rs 9.22 lakh of home loan capacity.
- Choose a longer tenure: it lifts the maximum, but adds interest, as the tenure table above shows.
- Qualify for a lower rate: a clean repayment history and a strong credit score help you get better pricing, and each 0.5% lower rate adds roughly Rs 1 lakh of capacity on a Rs 25,000 EMI.
- Declare all regular income: documented rental or other recurring income can count, depending on the lender.
Common Loan Affordability Mistakes
- Borrowing the full lender maximum: it leaves no margin for a rate rise or a drop in income.
- Forgetting the down payment and fees: the loan never covers the whole home cost, stamp duty or registration.
- Leaving out small EMIs: a phone EMI or a credit card EMI still counts against your FOIR limit.
- Using a bonus-inflated income: one-off bonuses do not repay a monthly EMI; use regular take-home pay.
- Picking the longest tenure by default: it raises the loan a little and the interest a lot.
Limitations of This Calculator
Lender rules vary. FOIR limits, how income is assessed and the closing age differ between lenders and loan products, so treat the result as an estimate.
Credit checks are not modelled. Your credit score and history can lower the offer or raise the rate, which reduces the loan.
Rates are held constant. A floating rate can change after you borrow, changing the EMI or the tenure.
Lender caps are not applied. Personal and car loans also have maximum amounts set by each lender, and car loans have their own financing limits on the vehicle price.
How to Use This Loan Affordability Calculator
- Loan type: pick Home Loan, Personal Loan or Car Loan. This sets a typical rate and tenure limit, both of which you can change.
- Income and EMIs: enter regular monthly take-home income and the total of all EMIs you already pay.
- Rate and tenure: enter the expected rate and tenure, or tap a preset.
- More settings: set the lender FOIR limit, your own comfort limit, your age and the age by which the loan must close.
- Read both answers: compare the maximum loan with the comfortable loan. For a home loan, check the property value and minimum down payment.
- Repayment schedule: open it to see how the maximum loan is repaid year by year. The Loan Amortization Calculator shows the full monthly schedule.
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Frequently Asked Questions
Disclaimer: All calculations on this page are indicative only and based on the inputs provided. Actual loan offers depend on each lender's credit policy, your credit history, income assessment, property valuation and current rates. Rates used in examples are illustrative, not lender quotes, and tenure limits cited are one lender's published terms. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult your lender or a qualified CA before borrowing.