Formula used
Maximum affordable EMI = (Net monthly income x FOIR%) minus existing EMIs. Eligible loan amount is the present value of that EMI over the chosen tenure at the expected rate: EMI x ((1+r)^n - 1) / (r x (1+r)^n).
Example calculation
With Rs 75,000 net monthly income, Rs 10,000 existing EMIs and a 50% FOIR cap, the maximum affordable EMI is Rs 27,500. At 14% for 48 months, that supports an estimated eligible loan of about Rs 10.1 lakh.
How to use this calculator
- Enter your net (take-home) monthly income.
- Enter the total of your existing monthly EMIs.
- Keep FOIR at 50% or adjust to match your target lender's norm.
- Enter the interest rate and tenure you expect to be offered.
- Read your maximum affordable EMI and estimated eligible loan amount.
Important assumptions
- Eligibility is estimated purely from income and obligations using a FOIR cap; credit score, employer category and lender policy are not modelled.
- The eligible amount assumes a standard reducing-balance loan at a constant rate over the chosen tenure.
- Educational estimate only. Lenders decide actual eligibility, and offers vary widely.
Common mistakes to avoid
- Using gross salary instead of net take-home income.
- Forgetting credit-card EMIs or buy-now-pay-later obligations in existing EMIs.
- Assuming the calculator's estimate is a sanctioned amount.
- Stretching FOIR to the maximum, leaving no room for emergencies.
- Ignoring how a longer tenure raises total interest even when eligibility rises.
How lenders decide personal loan eligibility
Indian lenders primarily test whether your income can absorb the new EMI. The common tool is FOIR — the share of net income already committed to fixed obligations. Most lenders keep total EMIs within roughly 40-55% of net monthly income, then check credit score, employment stability and documentation before sanctioning.
- FOIR cap: total EMIs within ~40-55% of net income.
- Credit score: 750+ typically improves offers.
- Stability: salaried applicants with steady employers often get better terms.
Worked example
Net income Rs 75,000, existing EMIs Rs 10,000, FOIR 50%: EMI capacity is Rs 37,500 - Rs 10,000 = Rs 27,500. At 14% for 48 months, Rs 27,500 per month supports a loan of about Rs 10.1 lakh, with total repayment of Rs 13.2 lakh. The gap of about Rs 3.1 lakh is interest — check whether the purpose of the loan justifies that cost.
How to improve your eligibility
Eligibility improves when EMI capacity rises or perceived risk falls.
- Close small existing EMIs before applying.
- Improve your credit score and correct report errors.
- Consider a modest tenure increase rather than maxing FOIR.
- Apply with income documents that show your full net income.
Source and Methodology
This calculator estimates borrowing capacity using a FOIR-based affordable EMI and the present-value formula for a reducing-balance loan. It does not access credit bureaus, lender policies or live rates, and it does not constitute an offer, approval or advice.
Related calculators and guides
You can cross-check this estimate using: salary in-hand calculator, Old vs New Tax Regime Calculator, 80C deduction calculator, EMI calculator, ITR-2 filing guide, emergency fund guide.
When this tool is useful
- When you want a fast estimate before making a financial or salary decision.
- When you want to compare different assumptions in seconds.
- When you want to understand the formula behind the result.