What is the 50 per cent FOIR rule?

FOIR stands for Fixed Obligation to Income Ratio. Lenders typically cap your total EMIs at 40 to 55 per cent of your monthly income. This calculator uses 50 per cent as the standard. If your monthly income is Rs 1 lakh and you have existing EMI of Rs 10,000, your available capacity for new EMI is Rs 40,000 per month.

What factors affect loan eligibility?

The primary factors are: monthly income (higher income means higher eligibility), existing obligations (existing EMIs reduce availability), interest rate (higher rate means lower eligibility for same EMI), tenure (longer tenure increases eligibility), age (younger applicants get longer tenures), credit score (CIBIL score above 750 improves approval chances and rates), and the type of loan (secured loans like home loans have higher eligibility than unsecured personal loans).

How much personal loan can I get on a Rs 30,000 salary?

On a monthly salary of Rs 30,000 with no existing EMIs, at 12 per cent interest for 5 years, your eligible loan amount is approximately Rs 6.7 lakhs. The calculation: 50 per cent of Rs 30,000 is Rs 15,000 available for EMI. At 12 per cent for 60 months, this supports a loan of about Rs 6.7 lakhs. Actual eligibility depends on your credit score and the lender policies.

What is the multiplier method for loan eligibility?

Some lenders use a simple multiplier on your annual income instead of the FOIR method. For personal loans, the multiplier ranges from 10 to 27 times your monthly income depending on the lender and your employer profile. For example, a salary of Rs 50,000 per month with a multiplier of 15 gives eligibility of Rs 7.5 lakhs. FOIR-based calculation is more accurate and this calculator uses that method.

Does my CIBIL score affect loan eligibility?

Yes. A CIBIL score above 750 generally qualifies for the best interest rates and maximum loan amounts. Scores between 700 and 750 may still qualify but with higher interest rates. Scores below 650 often face rejection or significantly reduced eligibility. This calculator shows the maximum eligible amount based on income and obligations, but your actual sanctioned amount depends on your credit score and lender policies.

Can I increase my loan eligibility?

Yes. You can increase loan eligibility by: adding a co-applicant with income, extending the loan tenure, reducing existing debt by prepaying outstanding loans, increasing your income through other sources, or improving your credit score above 750. Adding a co-applicant can increase eligibility by 30 to 50 per cent depending on their income.

How does tenure affect loan eligibility?

Longer tenure reduces the EMI amount for the same loan, which increases your eligibility. For example, at 10 per cent interest, a 3-year tenure supports a loan of Rs 5 lakhs with EMI of Rs 16,134. The same EMI over 5 years supports a loan of Rs 7.6 lakhs. However, longer tenure means more total interest paid over the life of the loan.

What is the difference between loan eligibility and loan sanction?

Loan eligibility is the maximum amount you qualify for based on your income and obligations. Loan sanction is the amount the lender actually approves after verifying your documents, credit score, employment, and other factors. Sanctioned amount can be lower than eligibility if you have a low credit score, irregular income, or other risk factors identified during underwriting.

What is the home loan eligibility for a Rs 1 lakh salary?

On a monthly salary of Rs 1,00,000 with no existing EMIs, at 8.5 per cent interest for 20 years, your eligible home loan amount is approximately Rs 57 lakhs. The calculation: available EMI of Rs 50,000 per month at 8.5 per cent for 240 months supports a loan of approximately Rs 57 lakhs. Adding a co-applicant can increase this further.

Do NRIs have different loan eligibility criteria?

NRI loan eligibility is calculated similarly using your foreign income, but lenders apply a different FOIR percentage (typically 40 to 50 per cent of gross income) and may require higher down payments. NRIs also face currency risk assessment and need to provide income proof such as employment contract, salary slips, and bank statements from the foreign country.

What is the loan eligibility for self-employed individuals?

For self-employed individuals, lenders assess eligibility based on average net profit from the last 2 to 3 years of IT returns instead of monthly salary. The FOIR calculation uses the monthly equivalent income (average annual profit divided by 12). Self-employed applicants typically need to provide IT returns, GST filings, and CA-certified financial statements.

How is the eligible loan amount calculated in this tool?

This calculator uses the FOIR method. It takes your monthly income, subtracts existing monthly obligations, applies the FOIR percentage (default 50 per cent), and uses the resulting available EMI capacity along with the interest rate and tenure to calculate the maximum loan amount you can afford.

What is the formula for loan eligibility?

Eligible Loan Amount = Maximum Loan where EMI equals Available Monthly Capacity. Available Capacity = (Monthly Income x FOIR Percentage) minus Existing Monthly Obligations. EMI = Loan Amount x (Monthly Rate x (1 + Monthly Rate)^Tenure) / ((1 + Monthly Rate)^Tenure minus 1). The calculator solves for Loan Amount given the EMI capacity.

How does a longer tenure change loan eligibility in practice?

At 10 per cent interest, extending a loan from 5 years to 10 years increases eligibility by roughly 60 per cent for the same available monthly EMI, since the same monthly payment can support a larger principal when spread over more months. Total interest paid does increase, so this is a trade-off between eligibility and total cost.

How much does reducing existing EMI obligations improve eligibility?

At 10 per cent interest over a 10-year tenure, every Rs 1,000 reduction in existing monthly EMI obligations adds roughly Rs 75,000 to your loan eligibility, since that freed-up capacity becomes available for a new loan instead.

Do NRIs need a co-applicant to get a loan in India?

Most Indian banks require a resident Indian co-applicant for NRI loans, typically a parent or close relative, since the loan is disbursed and recovered within India. NRI home loans also usually require a higher down payment (lower loan-to-value ratio) than resident home loans.

Does the RBI regulate how lenders calculate loan eligibility?

The RBI does not mandate a specific FOIR percentage, but it does require banks and NBFCs to follow responsible lending norms that include verifying a borrower’s repayment capacity before sanctioning any loan. The specific FOIR threshold and multiplier used are commercial decisions made by each individual lender within this broader responsible-lending framework.

Can two people combine their income for a joint loan eligibility calculation?

Yes. Adding a co-applicant, typically a spouse or parent, combines both incomes for the FOIR calculation, which can increase eligibility by 30 to 50 per cent depending on the co-applicant’s income and existing obligations. This is especially common and encouraged for home loans.

Fermor is a financial platform built for India. The calculators are the distribution layer: free tools that give real answers to real financial questions, with no sign-up required. The product being built is an automated financial action system that uses the Account Aggregator framework to connect real financial accounts and close the gap between knowing what you should do with your money and actually doing it. Fermor is not a comparison site or a content platform. The calculators earn trust. The action platform is the product.

Loan Eligibility Calculator: How Much Loan Can I Get? | Fermor

What Is Loan Eligibility?

Loan eligibility is the maximum amount a lender is willing to offer you based on your income, existing debt obligations, the interest rate, and the repayment tenure. It is expressed as a rupee amount.

Lenders calculate eligibility to check whether you can comfortably repay a loan without defaulting, capping your total monthly EMI at a fixed share of income, typically 50 per cent, known as FOIR (Fixed Obligation to Income Ratio). Each lender sets its own FOIR ceiling, usually between 40 and 55 per cent, depending on the loan type and risk profile.

The RBI mandates that lenders verify repayment capacity before sanctioning a loan, and FOIR is the primary tool banks and NBFCs use for this. Some lenders instead use the multiplier method for personal loans, where eligibility is a fixed multiple of annual income.

Loan Eligibility Formula: How It Works

The formula for loan eligibility involves two steps: finding your available EMI capacity and then solving for the loan amount that fits.

Step 1: Available EMI = (Monthly Income x FOIR%) minus Existing Obligations
Step 2: Loan Amount = EMI x ((1 + r)^n - 1) / (r x (1 + r)^n)
where r = monthly interest rate and n = number of months

Variable	Meaning
Monthly Income	Your total monthly earnings before tax
Existing Obligations	Total EMI you already pay on other loans
FOIR %	The percentage cap on total EMIs (typically 50%)
Interest Rate	Annual interest rate divided by 12 for monthly rate
Tenure	Loan repayment period in months
Eligible Loan Amount	The maximum loan you can afford given the constraints

Worked example: Monthly income of Rs 80,000, existing obligations of Rs 10,000, interest rate of 10.5%, tenure of 5 years. Available EMI = (80,000 x 50%) minus 10,000 = Rs 30,000 per month. The eligible loan amount at 10.5% for 60 months is approximately Rs 13,95,745. Your monthly EMI would be Rs 30,000, total interest payable is Rs 4,04,255, and total repayment is Rs 18,00,000.

FOIR Calculation Method: What Lenders Use

The FOIR method is the standard eligibility assessment used by most Indian banks and NBFCs. It calculates what percentage of your monthly income is already committed to loan repayments and caps the total at a threshold, usually 50 per cent. If your FOIR is below 50 per cent, you have capacity for a new loan. If it is above 50 per cent, your application may be rejected or sanctioned at a lower amount.

Different loan types have different FOIR thresholds. Home loans, being secured, often allow up to 55 to 60 per cent FOIR for high-income borrowers. Personal loans, being unsecured, are stricter at 40 to 50 per cent. Some lenders also factor in your age, with younger borrowers getting higher FOIR limits because they have longer earning potential.

Loan Type	Typical FOIR Cap	Notes
Home Loan	50 to 60%	Higher for co-applicant income inclusion
Personal Loan	40 to 50%	Stricter due to unsecured nature
Car Loan	45 to 55%	Vehicle acts as collateral
Education Loan	45 to 55%	Moratorium period considered
Credit Card	30 to 40%	Based on credit limit utilisation

Factors Affecting Loan Eligibility

Several factors determine how much a lender is willing to offer. Income is the most significant variable, but it interacts with other elements that can increase or decrease your eligible amount.

Factor	Impact on Eligibility
Monthly Income	Higher income increases eligibility proportionally
Existing Obligations	Higher existing EMIs reduce available EMI capacity
Interest Rate	Higher rates reduce the loan amount for the same EMI
Loan Tenure	Longer tenure increases eligibility but adds interest
Credit Score	Below 750 may reduce eligibility or attract higher rates
Age	Younger applicants qualify for longer tenures
Employer Profile	Government or MNC employers get higher multipliers

How to Improve Your Loan Eligibility

A low eligibility does not mean you cannot get a loan. These strategies can increase the amount a lender is willing to sanction.

Add a co-applicantIncluding your spouse, parent, or sibling as a co-applicant adds their income to the calculation. This can increase eligibility by 30 to 50 per cent. Home loans with joint applicants have significantly higher sanction amounts.

Extend the tenureA longer repayment period reduces the EMI, which increases the loan amount you can afford for the same monthly capacity. At 10 per cent interest, extending a 5-year loan to 10 years increases eligibility by roughly 60 per cent for the same available EMI, though total interest paid rises as well.

Reduce existing debtPrepaying an outstanding personal loan or credit card balance reduces your existing obligations. Every Rs 1,000 of reduced EMI adds roughly Rs 75,000 to your eligibility at 10 per cent over 10 years.

Improve your credit scoreA CIBIL score above 750 unlocks lower interest rates and higher eligibility. Pay all EMIs and credit card bills on time for 12 consecutive months to build score. Dispute any errors on your credit report.

Loan Eligibility by Income Level

The table below shows approximate loan eligibility for different income levels, assuming no existing obligations, at 10.5 per cent interest, with a 5-year tenure and 50 per cent FOIR.

Monthly Income	FOIR 50%	Eligible Loan (5yr)	Monthly EMI
Rs 25,000	Rs 12,500	Rs 5.82 L	Rs 12,500
Rs 50,000	Rs 25,000	Rs 11.63 L	Rs 25,000
Rs 75,000	Rs 37,500	Rs 17.45 L	Rs 37,500
Rs 1,00,000	Rs 50,000	Rs 23.26 L	Rs 50,000
Rs 2,00,000	Rs 1,00,000	Rs 46.52 L	Rs 1,00,000
Rs 5,00,000	Rs 2,50,000	Rs 1.16 Cr	Rs 2,50,000

Home Loan vs Personal Loan Eligibility

Home loans and personal loans have different eligibility criteria because one is secured by property and the other is unsecured. Home loans typically offer 3 to 5 times higher eligibility than personal loans for the same income.

Factor	Home Loan	Personal Loan
Typical FOIR Cap	50 to 60%	40 to 50%
Maximum Tenure	Up to 30 years	Up to 5 years
Interest Rate	8.5 to 10%	10.5 to 24%
Co-applicant	Allowed and encouraged	Limited or not allowed
Loan Amount	Up to 80 to 90% of property value	Up to 15 to 30x monthly income
Processing Time	1 to 3 weeks	1 to 3 days

Loan Eligibility in Excel: Using the PMT Function

The PMT function in Excel lets you calculate the EMI for a given loan amount, or you can reverse it to find eligibility. Assume A2 holds the monthly income, B2 holds existing obligations, and C2 holds the interest rate, and D2 holds tenure in years.

Calculation	Excel Formula
Available EMI	`=A2*50%-B2`
EMI for a loan	`=PMT(C2/12,D2*12,-E2) where E2 is loan amount`
Max loan from EMI	`=PV(C2/12,D2*12,-F2) where F2 is available EMI`
Total Payment	`=G2D212 where G2 is EMI`

The PV function is particularly useful. It directly calculates the loan amount you can afford given your available EMI, interest rate, and tenure.

Loan Eligibility for Self-Employed Applicants

Self-employed applicants are assessed differently from salaried employees because income is variable and harder to verify from a single payslip.

Lenders typically use the average net profit from the last 2 to 3 years of Income Tax Returns, converted to a monthly equivalent (annual average divided by 12), in place of a fixed monthly salary. Business owners and professionals such as doctors, chartered accountants, and consultants usually need to submit IT returns, GST filings, bank statements for the last 6 to 12 months, and a CA-certified profit and loss statement and balance sheet.

Because business income can fluctuate year to year, some lenders apply a more conservative FOIR (often 40 to 45 per cent instead of 50 per cent) for self-employed applicants, and may average across a declining or volatile income trend rather than simply using the most recent year. A consistent, growing income trend across the last 2 to 3 years generally strengthens eligibility more than a single strong year.

Loan Eligibility for NRIs

NRI loan eligibility follows the same FOIR logic but with adjustments for foreign income and cross-border risk.

Lenders convert foreign income to INR at the prevailing exchange rate and typically apply a stricter FOIR of 40 to 50 per cent to account for currency fluctuation risk. Required documents usually include an employment contract or offer letter, salary slips from the country of residence, overseas bank statements, a valid passport and visa, and often a resident Indian co-applicant, since recovery in case of default is easier within India.

NRI home loans in India also typically require a higher down payment (lower loan-to-value ratio) than resident home loans, and interest rates may carry a small premium over resident rates at some lenders.

Limitations of Loan Eligibility Calculators

Does not consider credit scoreThis calculator shows the maximum eligible amount based purely on income and obligations. Your actual sanction depends on your CIBIL score, which lenders weigh heavily. A low score can reduce the sanctioned amount or result in rejection regardless of your income.

Standard FOIR may not match your lenderDifferent lenders use different FOIR caps. Some go as high as 60 per cent for home loans, while personal loan lenders may cap at 40 per cent. The 50 per cent default is a middle estimate, not a universal rule.

Does not factor job stabilityLenders consider how long you have been employed, whether you are on probation, and your employment type. A freelancer with high income but short history may get lower eligibility than an equally paid government employee.

Excludes other financial commitmentsThe calculator only considers explicit EMIs. Lenders also assess other regular expenses, minimum credit card payments, insurance premiums, and dependent obligations which may reduce your actual eligibility.

How to Use This Loan Eligibility Calculator

The calculator uses the FOIR method to determine your maximum eligible loan amount:

Enter your monthly income: the total pre-tax income from all regular sources.
Enter existing obligations: the total EMI on any current loans or credit card debt.
Set interest rate and tenure: the expected loan interest rate and repayment period.
Adjust FOIR percentage: change it to match your lender threshold, or leave it at 50 per cent.

The result panel shows your eligible loan amount, monthly EMI, total interest payable, and total repayment. Click any input value to type a precise number. Use the currency selector to switch between INR, USD, EUR, GBP, and other currencies.

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Frequently Asked Questions

Loan eligibility is calculated using your monthly income, existing monthly obligations, the interest rate, and the loan tenure. Most lenders use the 50 per cent FOIR rule: your total monthly EMI payments including the proposed loan cannot exceed 50 per cent of your monthly income. The eligible loan amount is the maximum loan where the EMI fits within this limit.

Disclaimer: All calculations on this page are indicative only. Loan eligibility is a mathematical estimate based on the FOIR method and does not guarantee loan approval or sanction at the displayed amount. Actual loan eligibility depends on lender policies, credit score, document verification, and other factors assessed during underwriting. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult a SEBI-registered investment adviser or your lender before making borrowing decisions.

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