| Remaining EMI capacity at target | — |
|---|
Lender thresholds are not personal financial-safety guarantees.
How This Is Calculated
FOIR (Fixed Obligations to Income Ratio) measures what percentage of your gross income goes toward fixed monthly obligations — all EMIs and recurring debt payments combined. Lenders typically use FOIR (commonly capped around 40-50%) to assess how much additional loan a borrower can safely take on; a lower FOIR indicates more room for new borrowing.
Frequently Asked Questions
What is a healthy FOIR percentage?
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Most lenders cap FOIR around 40-50% of gross income for loan approval, but a more conservative personal target — well below the bank's maximum — leaves more room for savings, emergencies and other goals rather than being fully stretched on debt.
Does FOIR include rent as a fixed obligation?
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Lenders typically calculate FOIR based on EMI/debt obligations rather than rent, but from a personal budgeting perspective, it's worth including rent (or any recurring housing cost) when assessing your own true fixed-obligation burden, even if a bank's FOIR calculation doesn't.
How is FOIR different from a credit score?
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FOIR measures your current debt burden relative to income (a cash-flow capacity metric), while a credit score reflects your repayment history and credit behavior over time. Lenders typically use both together — a good credit score with a high FOIR can still lead to loan rejection or reduced eligibility.
Related guidance: Annuity Income and Inflation | Finin2min · Bad Debt Deduction: Write-Off, Income Recognition and Recovery | Finin2min
Methodology, assumptions and sources
Scope: Computes the Debt-to-Income (DTI) ratio and FOIR (Fixed Obligation to Income Ratio) commonly used by Indian lenders to assess loan eligibility.
Calculation logic
- DTI = (Total monthly debt obligations ÷ Gross monthly income) × 100.
- FOIR = (Total fixed monthly obligations, including the proposed new EMI, ÷ Net/gross monthly income, per the lender's convention) × 100.
- Compare the computed ratio against commonly used lender thresholds (typically 40–50% FOIR) to indicate likely eligibility headroom.
Inputs and assumptions
- Threshold benchmarks shown are general industry norms, not a specific bank's published policy — actual lender FOIR limits vary by lender and product.
- Income and obligation figures are as entered by the user; the calculator does not verify them against any credit bureau or bank record.
Exclusions and edge cases
- Does not account for co-applicant income unless entered as combined income.
- This is an indicative eligibility screen, not a substitute for a lender's formal credit assessment.
Sources
No external regulatory source applies — this is a general financial formula, not a statutory computation.
Review status: reviewed and approved by CA Nikhil Gupta on 17 July 2026.