Loan Eligibility Calculator — FOIR & NTH Method (2025)
This calculator uses the FOIR (Fixed Obligation to Income Ratio) and NTH (Net Take Home) methods to estimate the maximum loan amount a bank will sanction — the same methods used by credit officers in public sector and private banks across India. Enter your income, existing EMIs, loan type, and rate to get an instant eligibility figure.
- FOIR method: Max EMI = Gross Income × FOIR% − Existing obligations. Eligible loan = reverse EMI calculation.
- NTH method: After all deductions including new EMI, net take-home must stay ≥ 40% of gross (typical PSB norm).
- Binding constraint: Banks apply whichever gives the lower eligible amount — FOIR or NTH.
- Home Loan FOIR: 40% (≤₹25k gross) → 50% (₹25k–₹75k) → 60% (₹75k–₹2L) → 65% (above ₹2L)
- Personal / Car Loan FOIR: Typically 40%–45% of gross income, regardless of slab.
- Credit score: FOIR and NTH determine maximum eligibility. Credit score determines whether you get it.
Enter your income and loan details to check eligibility.
| Gross Monthly Income | — |
| FOIR Applied | — |
| Max total obligations allowed | — |
| Less: Existing obligations | — |
| Max EMI for new loan (FOIR) | — |
| Eligible Loan (FOIR method) | — |
| Net Monthly Income | — |
| Required minimum NTH (40% of gross) | — |
| Less: Existing obligations | — |
| Max EMI for new loan (NTH) | — |
| Eligible Loan (NTH method) | — |
| Loan Amount (eligible) | — |
| Interest Rate | — |
| Tenure | — |
| Monthly EMI | — |
| Total Amount Payable | — |
| Total Interest | — |
EMI formula: EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ−1) · where r = monthly rate, n = tenure in months · FOIR method: Max EMI = (Gross × FOIR%) − Existing obligations
How Banks Calculate Loan Eligibility in India
Indian banks — both PSBs (public sector banks) and private banks — use two parallel tests to determine how much loan you are eligible for. Your eligibility is capped at whichever test gives the lower figure.
The bank computes: Max EMI = Gross Monthly Income × FOIR% − Existing obligations. FOIR caps how much of your income can go towards all loan repayments combined. For a ₹80,000/month salaried person with 50% FOIR and ₹10,000 existing EMIs, max new EMI = (₹80,000 × 50%) − ₹10,000 = ₹30,000. The bank then back-calculates the loan amount that gives exactly ₹30,000 EMI at the given rate and tenure.
After all deductions — tax, PF, existing loan EMIs, and the new EMI — your net take-home must meet a minimum floor (typically 40% of gross under PSB norms). This ensures the borrower retains enough income for living expenses. NTH is checked on net (post-tax) income, not gross.
The eligible loan is the lower of the FOIR result and the NTH result. In most salaried cases, FOIR is the binding constraint. For borrowers with high statutory deductions (PF, income tax), NTH often bites first. This calculator shows you both, clearly.
FOIR Norms — PSB and Private Bank Standards (2025–26)
FOIR norms vary by loan type and gross income. The table below shows indicative norms used by most public sector banks in India. Private banks typically follow similar ranges but may go slightly higher for salaried customers with excellent credit profiles.
| Loan Type | Gross Income | FOIR (% of Gross) | NTH Floor |
|---|---|---|---|
| Home Loan / LAP | Up to ₹25,000/mo | 40% | 40% of gross |
| ₹25,001 – ₹75,000/mo | 50% | 40% of gross | |
| ₹75,001 – ₹2,00,000/mo | 60% | 40% of gross | |
| Above ₹2,00,000/mo | 65% | 40% of gross | |
| Personal Loan / Consumer Loan | 40% | 40–50% of gross | |
| Car / Vehicle Loan | 45% | 40% of gross | |
| Education Loan | 40% | 40% of gross | |
| Business / MSME Loan | 50% | Based on DSCR ≥ 1.5 | |
Source: Indicative norms from RBI guidelines and standard PSB credit manuals. Actual norms vary by bank and individual credit policy. Private banks may apply stricter or more flexible norms based on customer segment.
Frequently Asked Questions — Loan Eligibility Calculator
What is FOIR and how is it used in loan eligibility?
FOIR stands for Fixed Obligation to Income Ratio. It is the maximum percentage of your gross monthly income that can go towards all fixed loan repayment obligations (EMIs) combined. For example, if your gross income is ₹60,000 and the bank applies a 50% FOIR, your total EMI burden — existing loans plus the new loan — cannot exceed ₹30,000 per month. Banks use FOIR as the primary eligibility gate for salaried borrowers. The FOIR limit varies by loan type and income slab: home loans allow 40–65% depending on income; personal loans are capped at 40–45%.
What is NTH (Net Take Home) in loan eligibility?
NTH stands for Net Take Home — the amount of salary the borrower actually receives in hand after all statutory and voluntary deductions (income tax, PF, gratuity, existing EMIs, LIC premium deducted at source, etc.). Banks require that even after the new EMI is added, the borrower’s NTH must not fall below a floor — typically 40% of gross income for PSBs. This test protects the borrower from taking on so much debt that there is insufficient income left for daily living expenses. NTH is calculated on net income (after tax and PF), not gross income.
What is the maximum home loan I can get on a ₹1 lakh monthly salary?
On a gross monthly salary of ₹1,00,000, a bank applying 60% FOIR (the typical PSB norm for incomes in the ₹75k–₹2L range) allows a maximum total EMI of ₹60,000. Assuming no existing loan obligations, your maximum home loan EMI is ₹60,000. At 9% p.a. for 20 years (240 months), this translates to a loan of approximately ₹66–67 lakh. At 8.5% for 25 years, the eligibility rises to around ₹79–80 lakh. Use the calculator above for your exact figure. Your actual sanction will also depend on credit score, property valuation, and the bank’s LTV (Loan-to-Value) cap.
Does credit score affect loan eligibility calculated by FOIR?
FOIR determines the maximum loan amount based purely on income and repayment capacity. Credit score is a separate gate — it determines whether the bank will lend to you at all, and at what interest rate. A borrower with a 750+ CIBIL score may get the full FOIR-based eligibility at the quoted rate. A borrower with a 680 score might get a lower amount, a higher rate, or face rejection regardless of FOIR. In practice, a higher credit score also allows access to banks with slightly more generous FOIR norms (e.g. some private banks offer 65–70% FOIR to premium salaried customers).
How is loan eligibility calculated for self-employed borrowers?
For self-employed professionals (doctors, CAs, architects) and self-employed businesspeople, banks use net profit from the last 2–3 years of ITRs rather than a fixed monthly salary. The average monthly net profit (after tax, depreciation add-back) is treated as the income base. FOIR norms for self-employed are typically the same as for salaried, but banks also check DSCR (Debt Service Coverage Ratio) — typically ≥ 1.5 for business loans. Some banks average only the last 2 years of net profit; others take the lower of the 2 years. The income figure used by the bank may differ from your own estimate.
What existing obligations are counted in FOIR?
All fixed monthly obligations that reduce your repayment capacity are counted in FOIR. This includes: existing home loan EMIs, personal loan EMIs, car loan EMIs, credit card minimum dues (typically 5% of outstanding balance), gold loan EMIs, consumer durable loan EMIs, and any other loan deducted from salary. It does not typically include rent (since rent is not an obligation to a lender), utility bills, or insurance premiums not deducted from salary — though some banks may ask about these for a more conservative assessment. The cleaner your credit bureau report, the more accurately the bank can count your obligations.
What is the difference between loan eligibility and loan sanction amount?
Loan eligibility is the maximum amount you can qualify for based on income, FOIR, NTH, and creditworthiness. Loan sanction amount is the amount the bank actually approves, which may be lower due to: (1) property valuation — the bank applies an LTV (Loan-to-Value) cap, typically 75–90% of property value for home loans; (2) collateral sufficiency; (3) end-use assessment; (4) internal credit policy limits for the borrower’s category or employer. You may be eligible for ₹80 lakh but only sanctioned ₹60 lakh if the property is valued at ₹70 lakh and the LTV cap is 80%.