Loan Affordability & Max Borrowing Calculator
Find out exactly how much home loan or vehicle loan banks will sanction based on your monthly income and current loan obligations.
How it works
Lenders evaluate your borrowing capacity using FOIR (Fixed Obligation to Income Ratio). Typically, banks allow up to 40-50% of your gross monthly income to be committed towards total monthly debt repayments. Subtracting your existing EMIs gives your available EMI headroom, which is translated into maximum loan principal using the loan amortization formula.
Formula
Max Loan = EMI_avail × ((1 + r)^n - 1 / r(1 + r)^n), EMI_avail = (Income × FOIR) - Debts
Determines the maximum loan amount whose monthly EMI fits within your remaining income ceiling allowed by bank FOIR guidelines.
| Symbol | Variable | Unit | Description |
|---|---|---|---|
| EMI_avail | Maximum monthly payment capacity | ₹ | |
| FOIR | Fixed Obligation to Income Ratio (e.g. 50%) | decimal | |
| r | Monthly interest rate (Annual rate / 12) | decimal | |
| n | Total loan tenure in months | months |
Worked example
₹1,00,000 income with ₹15,000 existing EMI (8.5% interest, 20 yrs tenure, 50% FOIR)
- Income:
- ₹1,00,000
- Existing EMI:
- ₹15,000
- Rate:
- 8.5%
- Tenure:
- 20 yrs
Max allowed monthly debt outgo at 50% FOIR = ₹50,000. Available new EMI capacity = ₹50,000 - ₹15,000 = ₹35,000/month. At 8.5% interest over 20 years, an EMI of ₹35,000 supports a maximum loan of approximately ₹40.33 Lakhs.
Limitations
Final sanction depends on property valuation, legal verification, age, and employment stability.
Frequently asked questions
How can I increase my home loan eligibility in India?
You can increase your loan eligibility by adding a co-applicant (spouse or parent with verifiable income), choosing a longer loan tenure (e.g. 25-30 years), paying off existing short-term loans, or clearing credit card balances.
What is FOIR in home loan processing?
FOIR stands for Fixed Obligation to Income Ratio. It is the percentage of your monthly income that goes toward servicing all loan EMIs. Most Indian banks like SBI, HDFC, and ICICI cap FOIR between 40% and 55%.
Does having a high CIBIL score increase the loan amount I can get?
Yes. A credit score above 750 gives you access to lower interest rate tiers (saving thousands in EMI) and encourages lenders to approve higher FOIR limits up to 55-60%.
Related calculators
EMI Calculator
Calculate your monthly EMI, total interest, and full amortization schedule for any loan.
DTI (Debt-to-Income Ratio) Calculator
Calculate your Debt-to-Income (DTI) ratio to evaluate your financial health and loan approval eligibility.
Loan Prepayment & Extra Payment Calculator
Calculate how much interest and tenure you save on your home loan or personal loan by making extra monthly payments or prepayments.
Rent vs. Buy Calculator
Compare the total economic cost of buying a house versus renting and investing the difference in equity or mutual funds.
Last reviewed: 2026-08-22.