When you apply for a loan, the bank asks one main question: after your existing EMIs, how much of your monthly income is left for a new one? That share is FOIR.
What FOIR is
FOIR (fixed obligations to income ratio) is your total EMIs, including the new loan, divided by your monthly net income. Lenders commonly cap it somewhere between 40% and 60%, higher for bigger incomes and stronger credit profiles.
Worked example
- Net monthly income: ₹1,00,000
- Lender’s FOIR cap: 50%, so total EMIs can be ₹50,000
- Existing car loan EMI: ₹10,000, so room for a new EMI is ₹40,000
- Home loan at 8.5% for 20 years: EMI per lakh ≈ ₹868
- Eligible loan ≈ 40,000 ÷ 868 × 1,00,000 ≈ ₹46 lakh
Closing the car loan first
Clearing that ₹10,000 car EMI before applying raises the eligible home loan by about ₹11.5 lakh in this example.
What changes your limit
- Longer tenure lowers EMI per lakh and raises eligibility, at the cost of much more interest.
- A co-applicant’s income is added, along with their EMIs.
- Credit card outstanding is often counted as 5% of the balance per month, even if you pay in full.
- A CIBIL score of 750+ can get a higher FOIR cap and a lower rate.
Eligible vs comfortable
The bank’s limit is the most it will lend, not what you can comfortably repay. Many planners suggest keeping all EMIs within 30–40% of take-home pay so you can still fund your emergency fund, insurance and investments.
Calculators for this guide
Finkoin tip
Enter your income, existing EMIs and the loan rate to see your eligible amount and the EMI share of your pay.
Try it on Finkoin →FAQs
Clear answers in plain language. Educational guidance only.