Last updated 12 Nov 2026
Lenders decide how much you can borrow by asking one question: after paying your existing obligations, how much of your income is left to pay a new EMI? The ratio they use is FOIR, the fixed obligations to income ratio. FOIR is your total monthly obligations, including the new EMI, divided by your monthly income. Each lender sets the highest FOIR it will accept, and your credit history, age, job or business stability and documents also matter.
This guide shows the sums with a rupee example, explains what counts as income and as an obligation, and lists what you can do to raise the amount you are likely to get. It uses no interest rate. The EMI calculator and the FOIR calculator turn the EMI room into a loan amount at the rate you are offered.
What FOIR is
FOIR stands for fixed obligations to income ratio. It is the share of your monthly income that goes to fixed repayments. See FOIR and debt-to-income ratio for short definitions.
The formula
| Part | What it means |
|---|---|
| Monthly income considered | The income the lender accepts, after its own adjustments |
| Existing obligations | All EMIs, card minimum dues and other fixed payments that continue |
| New EMI | The EMI for the loan you want |
| FOIR | (existing obligations plus new EMI) divided by monthly income |
| Lender cap | The highest FOIR the lender allows; varies by lender, product and income |
A worked example
A salaried teacher in Pune takes home ₹80,000 a month after tax and deductions. The lender counts that as income. The teacher has a two-wheeler EMI of ₹5,000, a personal loan EMI of ₹5,000 and card minimum payments of ₹2,000, so existing obligations are ₹12,000. Suppose this lender allows a FOIR of 50%. That cap is an assumption for the example and not a rule.
EMI room worked out
| Step | Calculation | Result |
|---|---|---|
| Income considered | Given | ₹80,000 |
| Maximum total obligations at a 50% cap | ₹80,000 x 50% | ₹40,000 |
| Existing obligations | ₹5,000 + ₹5,000 + ₹2,000 | ₹12,000 |
| Room for the new EMI | ₹40,000 - ₹12,000 | ₹28,000 |
| FOIR with that new EMI | ₹40,000 / ₹80,000 | 50% |
So this lender may allow a new EMI of up to ₹28,000. The loan amount that EMI supports depends on the rate and tenure. Put the EMI and tenure into the EMI calculator to see it. If the teacher clears the ₹5,000 personal loan first, the room rises to ₹33,000.
How the same income gives different room
| Case | Existing obligations | Room at a 50% cap |
|---|---|---|
| No existing EMIs | ₹0 | ₹40,000 |
| Existing EMIs of ₹12,000 | ₹12,000 | ₹28,000 |
| Existing EMIs of ₹25,000 | ₹25,000 | ₹15,000 |
| Existing EMIs of ₹40,000 or more | ₹40,000 | ₹0 |
What counts as income
Income by profile
| Profile | What lenders usually look at | Points to know |
|---|---|---|
| Salaried | Net or gross salary from recent salary slips and bank credits; Form 16 | Variable pay and bonuses may be counted at a part, if at all |
| Self-employed professional | Income shown in recent income tax returns and statements | Lenders usually use the figure after tax and depreciation, not turnover |
| Business owner | Profit from returns and financial statements, and bank turnover | Cash that is not in books is usually not counted |
| Pensioner | Pension credits | Age and tenure limits matter more |
| Rental income | Rent from agreement and bank credits | Often counted at a part to allow for vacancy and tax |
| Co-applicant income | Added when the co-applicant is a co-borrower | Their obligations are added too |
See Loan documents and KYC and ITR for the papers lenders ask for.
What counts as an obligation
- Every running EMI: home, car, personal, education, gold and consumer loans.
- Credit card minimum dues, and sometimes a share of the total outstanding if it is large.
- Overdraft and credit line payments, in some cases the interest.
- Rent you pay, for some lenders and some products.
- Regular commitments such as maintenance or insurance premiums that the lender asks you to declare.
A loan with fewer than a few months left may be ignored by some lenders and counted by others. Ask the lender, and ask for a closure letter if you clear a loan to improve your position.
The other things lenders weigh
Beyond FOIR
| Factor | Why it matters |
|---|---|
| Credit score and history | Missed payments and high card use make lenders cautious. See the credit score guide |
| Age and tenure | The loan must end before a lender-set age; this limits tenure for older borrowers |
| Job or business stability | Time in the current job, or years in business, shows steadiness |
| Type and purpose of loan | Secured loans also look at the value of the asset and the LTV |
| Existing relationship | A salary account with the lender can help |
| Documents | Gaps or mismatches in KYC and income papers can lead to refusal |
Read Credit score and credit report for the credit side.
How to raise the amount you are likely to get
- Pay off small loans and cards first. Each EMI cleared adds to your room.
- Add a co-applicant with income, if the lender allows it. See the co-applicant guide.
- Choose a longer tenure to lower the EMI, but weigh the extra interest.
- Reduce credit card use before applying.
- Fix errors on your credit report.
- Keep income proof complete and consistent, and keep salary credits in the same account.
- Ask for a lower amount that fits well inside the room. A smaller request is easier to approve.
Read Co-applicant vs guarantor and Debt consolidation.
Why applying everywhere does not help
Every lender that checks your report leaves an enquiry on it. Several enquiries in a short time can lower your score. LOANZ 360 is a loan aggregator, not a lender. It compares your details with each partner lender's published eligibility criteria before any application goes to a lender, so you apply only where you are likely to qualify. This helps avoid unnecessary credit enquiries; too many lender checks in a short time can lower your score. Our team prepares a credit assessment summary before the file reaches a lender. The lender takes the final decision.
Frequently asked questions
What is a good FOIR?
There is no single figure. Each lender sets its own cap by product and income. A lower FOIR is safer for you and easier for the lender to approve. Ask the lender what cap it applies.
Does a credit card with no balance count in FOIR?
Many lenders count a minimum payment only if there is an outstanding balance. Some treat a part of the limit as a liability. Ask the lender how it treats unused limits.
Does FOIR change for a home loan?
Lenders may allow a higher or lower FOIR depending on the product, income and the value of the property. The LTV on the property is a separate check on the loan size.
Can I include my spouse's income?
If your spouse applies as a co-applicant, the lender can add their income and also their existing obligations. Both credit histories are checked.
How is the loan amount worked out from the EMI?
The EMI room, the tenure and the rate together give the loan amount. A longer tenure or a lower rate increases the amount for the same EMI. Use the EMI calculator with your offered rate.
Will paying off a loan help my eligibility?
Yes, if the EMI goes away. Ask the lender for the closure letter and make sure the credit report is updated before you apply.
Related reading: Credit score and credit report, Co-applicant vs guarantor, Debt consolidation, Loan documents and KYC, Key Fact Statement and APR, FOIR, Eligibility criteria, FOIR calculator, Eligibility calculator, Check your eligibility.