How to use the Loan Eligibility Calculator
- Enter your net monthly income, meaning the amount that reaches your bank account after deductions.
- Enter the total of all EMIs you already pay, including car, personal and credit card EMIs. Enter 0 if you have none.
- Choose the share of income a lender may allow for EMIs. Around 50% is common, and lower for lower incomes.
- Enter the expected interest rate and tenure to see the estimated loan, the EMI you can afford and the interest on that loan.
Formula used
Affordable EMI = income × share − existing EMIs. Loan = EMI × (1 − (1 + r)⁻ⁿ) ÷ r, where r is the monthly rate and n the number of months.
Worked example
Here is the Loan Eligibility Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Net monthly income | ₹80,000 |
| Existing EMIs per month | ₹10,000 |
| Share of income for EMIs | 50% (common) |
| Interest rate (per year) | 8.5 % |
| Loan tenure | 20 years |
| Result | |
| Estimated eligible loan | ₹34,56,925 |
| EMI you can afford | ₹30,000 |
| Total interest on that loan | ₹37,43,075 |
Eligible loan by tenure
With the same income, rate and existing EMIs, a longer tenure lets you borrow more, but you pay interest for longer.
| Tenure | EMI you can afford | Eligible loan |
|---|---|---|
| 10 years | ₹30,000 | ₹24,19,634 |
| 15 years | ₹30,000 | ₹30,46,491 |
| 20 years | ₹30,000 | ₹34,56,925 |
| 25 years | ₹30,000 | ₹37,25,657 |
| 30 years | ₹30,000 | ₹39,01,609 |
How banks decide your loan amount
Most lenders use a ratio called FOIR, the fixed obligation to income ratio. It is the share of your monthly income that goes to fixed payments such as EMIs. If the lender allows 50% and your income is ₹80,000, total EMIs can be at most ₹40,000. After subtracting existing EMIs of ₹10,000, you can afford a new EMI of ₹30,000.
The loan that this EMI supports is found by working the EMI formula backwards: Loan = EMI × (1 − (1 + r)⁻ⁿ) ÷ r. With an EMI of ₹30,000, a rate of 8.5% and 20 years, the estimated loan is ₹34,56,925, and you would pay about ₹37,43,075 as interest over the full tenure.
How tenure, rate and existing EMIs change the answer
A longer tenure raises the loan you qualify for because each rupee of EMI covers more principal. With the same income and EMIs, 10 years gives ₹24,19,634, 20 years gives ₹34,56,925 and 30 years gives ₹39,01,609. The cost is far more interest, so a bigger eligible loan is not always a better deal.
Rate matters too. At 20 years, an 8% rate supports ₹35,86,629, 8.5% supports ₹34,56,925 and 10% supports ₹31,08,739. Existing EMIs hurt eligibility strongly: without the ₹10,000 of existing EMIs, the same income supports ₹46,09,234.
Other things lenders check
Income is only one part of the decision. Lenders also look at your credit score, your age and years to retirement, your job or business stability, the value of the property or vehicle, and any other debts. Many lenders also lend only a share of the property value, so you need a down payment.
A higher credit score often leads to a lower interest rate, which raises the loan you can afford. Paying off a small loan before you apply can lift your eligibility more than you expect.
Borrow less than the maximum
The maximum is not the same as what is comfortable. An EMI at half of your income leaves less room for rent changes, medical costs or a job gap. Many people aim for an EMI well below the lender’s limit and keep an emergency fund of several months of expenses.
Use the result to set a budget, then compare real offers from lenders. Fees, insurance and prepayment terms are not included here.
Frequently asked questions
What is FOIR in a loan?
FOIR is the fixed obligation to income ratio, the share of monthly income that goes to fixed payments such as EMIs. Lenders use it to decide how large an EMI you can carry.
Is the result the exact amount the bank will lend?
No. It is an estimate based on income and EMIs. Credit score, age, employer, property value and the lender’s own policy also affect the final sanction.
Which income should I enter?
Enter your net monthly income. Some lenders use gross income, so you may qualify for a different amount. Ask your lender what it counts.
Do credit card dues count?
Lenders often include credit card minimum payments or monthly obligations. Add them to your existing EMIs for a safer estimate.
How can I increase my loan eligibility?
Reduce existing EMIs, add a co-applicant with income, improve your credit score, or choose a longer tenure. Each has trade-offs.
Does this work for a home, car or personal loan?
Yes. The same EMI-based logic applies. Actual limits and rules differ by loan type and lender.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.