Loan Eligibility Calculator: How Much Loan Can You Get?

Banks use a metric called FOIR (Fixed Obligation to Income Ratio) to determine how much you can borrow. The principle is simple: your total monthly EMI obligations (all loans combined) should not exceed 40-50% of your net monthly income. This ensures you have enough income left for living expenses and emergencies.

Here's how it works: If your net monthly income is ₹1,00,000 and the bank uses a 50% FOIR limit, your maximum allowable EMI is ₹50,000. If you already have existing EMIs of ₹15,000 (say, a car loan), you can take on new EMIs of up to ₹35,000. Using this ₹35,000 EMI capacity, the bank calculates the maximum loan amount you qualify for based on the interest rate and tenure.

For example, at 8.5% interest for 20 years, a ₹35,000 monthly EMI translates to a loan eligibility of approximately ₹48 lakhs. This is your maximum borrowing capacity under these parameters. Different banks use different FOIR limits (some conservative at 40%, others liberal at 55%), which is why eligibility varies across lenders.

Several factors influence how much you can borrow. Understanding these helps you improve your eligibility:

Net Monthly Income: This is your take-home salary after all deductions (PF, taxes, etc.). Higher income = higher eligibility. If you have additional income sources (rental income, freelance work), some banks consider these too, though they might apply a discount factor.

Existing EMI Obligations: Every rupee you're already paying toward other loans reduces your capacity for new loans. This is why paying off smaller loans before applying for a home loan can significantly boost your eligibility.

Credit Score: A CIBIL score of 750+ is considered excellent and can increase your eligibility by 10-20%. Scores below 650 might result in rejection or reduced loan amounts. Banks view high credit scores as indicators of responsible borrowing behavior.

Age: Younger borrowers can get longer tenures (up to 30 years), which increases eligibility since longer tenure means lower EMI for the same loan amount. Older borrowers might be restricted to shorter tenures, reducing maximum loan amount.

Employment Stability: Salaried employees with stable jobs at reputed companies get better eligibility than those with frequent job changes. Self-employed individuals might face stricter scrutiny and need to show consistent income over 2-3 years.

Co-applicant Income: Adding a earning family member (spouse, parent) as co-applicant combines incomes, potentially doubling your eligibility. This is especially useful for couples buying their first home.

Our calculator makes eligibility estimation simple and instant. Here's how to use it effectively:

Step 1: Enter Your Net Monthly Income - This is your in-hand salary, not your CTC. If you're self-employed, use your average monthly profit after expenses. Be conservative—overestimating can lead to unrealistic expectations.

Step 2: Input Existing EMI Obligations - Add up all your current monthly EMIs—car loan, personal loan, credit card EMIs, other home loans, etc. Don't forget to include any EMIs that will continue during your new loan tenure.

Step 3: Select Loan Type and Interest Rate - Different loan types have different interest rates. Home loans are cheapest (currently 8.5-9.5%), followed by car loans (9-11%), then personal loans (11-16%). Use current market rates or the rate quoted by your preferred lender.

Step 4: Choose Your Desired Tenure - Longer tenure increases eligibility but means more total interest. Balance between affordable EMI and reasonable total interest cost.

Step 5: Review Results - The calculator shows your maximum eligible loan amount. Remember, this is the maximum—you don't have to borrow the full amount. Borrow only what you need and can comfortably repay.

If your current eligibility falls short of your needs, try these proven strategies:

Clear Existing Debts: Paying off smaller loans frees up EMI capacity. If you have a personal loan with ₹10,000 monthly EMI, clearing it could increase your home loan eligibility by ₹15-20 lakhs. Prioritize high-EMI, short-tenure loans for closure.

Add a Co-applicant: Including your spouse or parent as co-applicant combines incomes. If you earn ₹60,000 and your spouse earns ₹40,000, your combined income of ₹1,00,000 significantly boosts eligibility. Ensure the co-applicant has a good credit score too.

Improve Your Credit Score: Pay all EMIs and credit card bills on time, keep credit utilization below 30%, don't apply for multiple loans simultaneously, and check your credit report for errors. Improving your score from 650 to 750+ can take 6-12 months but dramatically improves loan terms.

Increase Your Down Payment: If you can't get the full loan amount you need, a larger down payment bridges the gap. Instead of 20% down payment, consider 30-35%. This also reduces your EMI burden and total interest paid.

Opt for Longer Tenure: If you're young, choosing a 25-30 year tenure instead of 15-20 years increases eligibility since the EMI is lower. You can always prepay to close the loan faster once your income increases.

Show Additional Income: If you have rental income, freelance earnings, or investment returns, provide documentation. Banks might consider 50-70% of this income for eligibility calculation.

Choose the Right Lender: Different banks have different FOIR limits and eligibility criteria. Shop around—one bank might offer 20-30% higher eligibility than another for the same profile.

Important distinction: Loan eligibility is the maximum amount you qualify for based on income and obligations. Loan approval is what the bank actually sanctions after verifying your documents, property valuation, and creditworthiness. Eligibility ≠ guaranteed approval.

For example, you might be eligible for ₹50 lakhs, but if the property you're buying is valued at only ₹40 lakhs by the bank's appraiser, you'll get a loan based on that lower valuation (typically 80-90% of property value). Similarly, if document verification reveals income inconsistencies or credit report shows recent defaults, approval might be denied despite eligibility.

Also, using our calculator is a 'soft inquiry' that doesn't affect your credit score. However, formally applying for a loan triggers a 'hard inquiry' that temporarily impacts your score. Don't apply to multiple banks simultaneously—it creates multiple hard inquiries and signals desperation to lenders.

Use our calculator to understand your capacity, then approach 2-3 lenders for formal quotes. Compare offers on interest rate, processing fees, and prepayment terms before choosing.