Loan Eligibility Calculator

Your Details

How Much Loan Can You Get? A Complete Guide to Loan Eligibility

Applying for a loan can be a stressful process, but understanding your eligibility beforehand can save you time and effort. Whether you are planning to buy your dream home, a new car, or need funds for personal expenses, lenders evaluate your repayment capacity before approving a loan. Our Loan Eligibility Calculator helps you estimate the maximum loan amount you can secure based on your monthly income, existing EMIs, and the type of loan you are applying for.

In this guide, we will walk you through how banks calculate your eligibility, what FOIR means, and how you can improve your chances of getting a higher loan amount.

What is FOIR and Why Does It Matter?

FOIR stands for Fixed Obligation to Income Ratio. It is the percentage of your monthly income that lenders are willing to let you spend on EMIs. A lower FOIR means you have more disposable income and are considered a lower-risk borrower. Here is the standard FOIR used by most Indian banks:

• Home Loan: 50% of your monthly income
• Car Loan: 40% of your monthly income
• Personal Loan: 35% of your monthly income

For example, if your monthly income is ₹50,000 and you apply for a home loan, the bank will assume you can pay up to ₹25,000 as EMI. If you already have an existing EMI of ₹5,000, the maximum EMI you can afford for the new loan will be ₹20,000.

How is the Maximum Loan Amount Calculated?

Once the lender determines your maximum EMI capacity (based on FOIR), they use the EMI formula to calculate the loan amount you can afford. The formula considers the interest rate and tenure. A longer tenure means a lower EMI, which allows you to borrow a higher amount, but you end up paying more interest over time. A shorter tenure means a higher EMI but lower total interest.

Our calculator does this complex math for you. Just input your income, existing EMIs, loan type, interest rate, and tenure, and it will instantly show you the maximum loan amount you are eligible for.

Factors That Affect Loan Eligibility

Apart from income and FOIR, lenders look at several other factors:

• Age: Most banks require you to be between 21 and 65 years old. The loan tenure is often capped so that it ends before you retire.
• Credit Score: A CIBIL score of 750 or above is considered good. A low score can lead to rejection or higher interest rates.
• Employment Type: Salaried individuals with a stable job are preferred over self-employed individuals.
• Existing Liabilities: The more EMIs you already have, the lower your eligibility for a new loan.

Frequently Asked Questions (FAQs)

Q: Can I get a loan if my FOIR is high?
A: If your existing EMIs are too high, your FOIR will be high, and lenders may reject your application. You can reduce your existing debt or apply for a longer tenure to lower the EMI burden.

Q: How can I increase my loan eligibility?
A: You can increase your eligibility by adding a co-applicant (like a spouse), improving your credit score, or opting for a longer tenure. Sometimes, showing additional income sources also helps.

Q: Does a higher tenure mean more loan?
A: Yes, a longer tenure reduces your monthly EMI, which allows you to borrow a larger amount. However, you should be aware that you will pay more interest overall.

Q: What is the maximum tenure for a home loan?
A: Most banks offer home loans for up to 30 years, depending on your age. The loan must typically be repaid by the time you turn 65.

When Should You Use This Calculator?

Use this loan eligibility calculator before you start house hunting or applying for a loan. It gives you a realistic idea of your budget, so you can shortlist properties or cars within your reach. It also helps you compare offers from different banks and negotiate better terms.

Related Calculators

• EMI Calculator — Calculate your monthly EMI
• Income Tax Calculator — Estimate your tax liability
• SIP Calculator — Plan your investments
• Salary Calculator — Calculate in-hand salary