Loan Eligibility Calculator
Check how much loan you can get based on income, EMIs, and credit score.
Income Details
Add spouse/parent income to increase eligibility
Usually 40-60% depending on lender
Best rates, max eligibility
Affordability Breakdown
- • Add a co-applicant (spouse/parent) to increase combined income
- • Close existing loans to reduce EMI burden
- • Increase tenure to lower EMI and get higher principal
- • Improve credit score to 750+ for maximum eligibility
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How Banks Determine Loan Eligibility
When you apply for a loan, banks don't just look at your salary—they evaluate your ability to repay. The key metric is FOIR (Fixed Obligation to Income Ratio), which limits how much of your income can go towards EMIs.
Typically, banks cap total EMIs at 40-60% of net monthly income. If you already have existing loans, they reduce your new loan eligibility. Your credit score, employment type, and loan tenure also significantly impact the amount you can borrow.
The Eligibility Formula
Max New EMI = (Income × FOIR%) - Existing EMIs
Max Loan = Reverse EMI calculation based on rate & tenureExample: Income $5,000, FOIR 50%, Existing EMI $500, Rate 8%, Tenure 20 years
Max New EMI = ($5,000 × 50%) - $500 = $2,000
Max Loan at $2,000 EMI, 8%, 20 years = ~$240,000
Factors Affecting Loan Eligibility
Income Level
Higher income = higher eligibility. Include all stable income sources. Adding a co-applicant (spouse/parent) combines incomes, potentially doubling eligibility.
Credit Score
750+ gets maximum eligibility and best rates. Below 650 significantly reduces eligibility and increases rates. Below 600 often means rejection.
Existing Debts
Current EMIs directly reduce new loan eligibility. Closing even one existing loan can increase eligibility by lakhs. Include all loans and credit cards.
Co-Applicant
Adding an earning family member combines incomes. A working spouse or parent can significantly increase your maximum loan amount.
Credit Score Impact on Eligibility
| Credit Score | Eligibility | Rate Impact | Lender Response |
|---|---|---|---|
| 750+ | 100% | Base Rate | Best offers, fast approval |
| 700-749 | 90% | +0.25-0.5% | Good offers, normal process |
| 650-699 | 75% | +1-2% | Additional scrutiny, higher down payment |
| 600-649 | 50% | +3-4% | Limited options, collateral may be needed |
| Below 600 | Likely 0% | N/A | Most lenders reject |
Calculator Features
Frequently Asked Questions
What is FOIR and how does it affect loan eligibility?
FOIR (Fixed Obligation to Income Ratio) is the percentage of your income that can go towards EMIs. Banks typically cap this at 40-60%. Formula: FOIR = (All EMIs ÷ Net Monthly Income) × 100. Example: If you earn $5,000/month and FOIR limit is 50%, your max total EMIs = $2,500. If you already pay $500 in car loan, only $2,000 is available for new loan. Higher income = higher FOIR limit (banks allow 55-60% for incomes above certain thresholds).
How does credit score affect loan eligibility?
Credit score significantly impacts eligibility: 750+ (Excellent): Maximum eligibility, best interest rates. 700-749 (Good): About 90% of max eligibility, good rates. 650-699 (Fair): 75% eligibility, higher rates (+1-2%). 600-649 (Poor): 50% eligibility, much higher rates (+3-4%). Below 600: Likely rejection by most lenders. A 100-point improvement can increase eligibility by 20-30% and save thousands in interest over the loan term.
Can adding a co-applicant increase loan eligibility?
Yes, significantly! Co-applicants pool incomes, directly increasing the FOIR limit. Example: You earn $5,000, spouse earns $4,000. Combined = $9,000. At 50% FOIR, max EMI = $4,500 vs $2,500 alone. This can nearly double your loan eligibility. Co-applicants also share liability, so choose wisely. Common co-applicants: spouse (most preferred), parents, siblings. Some banks mandate co-applicant if property is co-owned.
What is Debt-to-Income (DTI) ratio?
DTI ratio measures your debt burden relative to income: DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100. Similar to FOIR but may include non-EMI debts. Ideal DTI: Below 36% is considered healthy. 36-43%: Manageable but monitor carefully. Above 43%: Most lenders hesitate. Above 50%: High risk, limited options. Lowering DTI improves eligibility and often gets you better rates.
How does loan tenure affect eligibility?
Longer tenure = Higher eligibility (but more total interest). EMI decreases with longer tenure, fitting more principal within your FOIR limit. Example at 8% interest for $100,000 loan: 10-year tenure: EMI $1,213. 20-year tenure: EMI $836. 30-year tenure: EMI $733. The 30-year option has 43% lower EMI, allowing significantly higher principal for same income. Trade-off: 30-year loan pays $164,000 more in interest than 10-year. Choose wisely based on goals.
What counts as 'existing EMIs' for eligibility calculation?
Include ALL fixed monthly obligations: (1) Car loan EMIs, (2) Personal loan EMIs, (3) Credit card minimum payments (banks often count 5% of outstanding as monthly obligation), (4) Any other active loan EMIs, (5) Education loan EMIs (if in repayment phase), (6) Rent/mortgage on other properties. Don't include: utility bills, insurance premiums, groceries, discretionary spending. Banks will verify these from your credit report—be accurate.
Does employment type matter for loan eligibility?
Yes, significantly: Salaried (Government): Highest eligibility, lowest risk. Salaried (MNC/Top Private): Very good, stable income assumed. Salaried (Small Companies): Moderate, may need income proof. Self-Employed Professional (Doctor, CA, Lawyer): Good, but need ITR for 2-3 years. Self-Employed Business: Most scrutiny, need business financials. Some lenders offer 10-15% higher eligibility for government/PSU employees due to job security.
What documents are needed for loan eligibility assessment?
For Salaried: (1) Salary slips (3-6 months), (2) Bank statements (6-12 months), (3) Form 16 / ITR, (4) ID & address proof, (5) Employment letter. For Self-Employed: (1) ITR for 2-3 years, (2) Business financials (P&L, Balance Sheet), (3) Bank statements (12 months), (4) GST returns, (5) Business proof. For Property Loans: Add property documents, sale agreement, builder approvals.
How can I improve my loan eligibility quickly?
Quick improvements: (1) Add co-applicant (spouse/parent), (2) Increase tenure to lower EMI requirement, (3) Close or reduce existing loans, (4) Clear credit card dues (even if not late), (5) Correct errors in credit report. Medium-term (3-6 months): (1) Improve credit score by paying all bills on time, (2) Avoid new credit applications, (3) Reduce credit utilization below 30%, (4) Get income increments/bonus reflected. Every $500 reduction in existing EMI can increase eligibility by $50,000-70,000.
What is the typical FOIR limit for different income levels?
Banks adjust FOIR based on income: Low Income (below $3,000/month): 35-40% FOIR, assumes higher living expenses ratio. Middle Income ($3,000-10,000): 45-50% FOIR, standard limit. High Income ($10,000-25,000): 50-55% FOIR, more discretionary budget assumed. Very High Income (above $25,000): 55-60% FOIR, sometimes higher. These aren't fixed rules—banks evaluate individually based on overall financial profile, job stability, and credit history.