What is FOIR?
FOIR stands for Fixed Obligation to Income Ratio — the share of your monthly income that is already committed to fixed repayments before a new loan is added. Indian banks and NBFCs use it as one of the main checks on how much more EMI you can realistically take on. For the full picture of how lenders apply it, see our FOIR guide.
How is FOIR calculated for a home loan or a personal loan?
The calculation this tool uses is the standard one:
Once your current FOIR is known, this calculator estimates spare capacity against an assumed ceiling you choose:
Additional EMI capacity = Maximum total EMI capacity − Current fixed obligations
That additional capacity is then converted into an estimated loan principal using the standard reducing-balance EMI formula, solved for the loan amount rather than the instalment:
where EMI is the additional monthly capacity, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments (years × 12).
A worked example
Someone earning ₹50,000 a month with an existing EMI of ₹10,000 and no other fixed debt:
Current FOIR = ₹10,000 ÷ ₹50,000 × 100 = 20%
If they assume a maximum FOIR of 50%, maximum total EMI capacity is ₹50,000 × 50% = ₹25,000, leaving additional EMI capacity of ₹25,000 − ₹10,000 = ₹15,000 a month. At a 14% personal loan rate over 5 years, that ₹15,000 monthly capacity would support an estimated loan principal of roughly ₹6.4 lakh — before the lender applies its own income, credit and policy checks.
What counts as a fixed obligation?
- EMIs on existing loans — home, car, personal, education, consumer durable
- Credit card dues, typically assessed as the minimum due or a share of the outstanding balance
- Monthly rent, which many lenders include for salaried applicants
- Any other recurring debt repayment you are contractually committed to
What usually does NOT count as a fixed obligation?
- Everyday living expenses — groceries, utilities, fuel, general spending
- Statutory deductions such as provident fund and professional tax
- Voluntary savings and investments, including SIPs, recurring deposits and fixed deposits
Lenders differ on the finer points, particularly rent and credit card treatment, so these are general patterns rather than a fixed rule every institution follows.
Why FOIR matters for loan eligibility
Two applicants with identical credit scores can get very different loan offers if their FOIR differs. A strong score tells a lender you generally repay on time; FOIR tells them whether your monthly budget can absorb one more instalment. Lenders weigh both, and a high FOIR can limit or block a loan even when the score is excellent.
How can you reduce your FOIR?
- Clear the loan with the highest EMI for its balance first. FOIR counts monthly outgo, not total debt owed — closing the loan with the highest monthly instalment relative to its balance helps most.
- Pay down credit card balances. Card dues count as an obligation in most lenders' calculations, so clearing them removes that line entirely.
- Add an earning co-applicant. This increases the income side of the ratio, though their existing obligations are added too.
- Wait out a shorter existing loan. If a current EMI is close to ending, its monthly commitment disappears from the calculation soon regardless.
FOIR vs credit score
These measure two different things. Your credit score reflects repayment history — whether you have paid on time in the past. FOIR reflects present capacity — whether your current income can absorb a new instalment alongside what you already owe. A good score with a high FOIR can still be declined; a fair score with a low FOIR can sometimes still be approved. Lenders generally assess both, not one instead of the other.
FOIR for home loans vs personal loans
Because a home loan is secured against the property, lenders are typically willing to stretch FOIR somewhat higher and offer longer tenures than they would for an unsecured personal loan. Personal loans carry no collateral, so lenders tend to apply tighter FOIR ceilings and shorter tenures to limit their exposure. Loan-to-Value is also a separate constraint on home loans — your final eligibility is the lower of your FOIR-based capacity and what the property valuation supports. See our loans section for more on how loan costs are structured.