How is Loan Eligibility Calculated?
Before approving a loan, banks need to ensure you have enough surplus income to pay the new EMI comfortably without struggling with your daily expenses. To do this, they use the FOIR (Fixed Obligation to Income Ratio) rule. Generally, banks allow up to 50% of your net monthly income to be used towards total EMIs. Our Loan Eligibility Checker instantly applies this banking logic, deducting your existing EMIs to show you the maximum new loan amount you can qualify for.
Frequently Asked Questions (FAQs)
What is FOIR in banking?
FOIR stands for Fixed Obligation to Income Ratio. It is the percentage of your monthly income that is currently being used to pay off existing debts. Most Indian banks prefer a FOIR of 40% to 50% to approve a new loan.
How can I increase my loan eligibility?
You can increase your loan limit by paying off existing small debts (which reduces your current EMIs), opting for a longer loan tenure (which reduces the monthly EMI requirement), or adding a working co-applicant (like a spouse) to combine incomes.
Does checking eligibility affect my CIBIL score?
No! Using our anonymous loan calculator does not trigger a hard inquiry on your credit report. It is completely safe and has zero impact on your CIBIL score.