FOIR Explained: The Ratio That Decides Your Loan Amount
Published 10 October 2026 · 5 min read · Clean EMI Editorial
If you have wondered why a bank offers a smaller loan than your calculator showed, the answer is often FOIR. It is the single number that links your income, your existing loans and the new EMI you can be given.
Part of the Home Loan guide series.
What FOIR means
FOIR is the fixed obligation to income ratio: (all monthly EMIs and fixed obligations ÷ net monthly income) × 100. If you earn ₹80,000 and pay ₹20,000 in EMIs, your FOIR is 25%.
The limit banks apply
Banks set a maximum FOIR, often in the 40-60% range, depending on income level, employer type and the lender’s policy. A higher income often gets a higher permitted ratio. The new EMI must fit within the gap between your current FOIR and that cap.
Example
Net income ₹80,000 with a 50% cap gives total EMI room of ₹40,000. With ₹10,000 of existing EMIs, the new loan EMI can be ₹30,000, which supports about ₹34.6 lakh over 20 years at an illustrative 8.5%. Remove the ₹10,000 car loan and the room grows to ₹40,000, or about ₹46.1 lakh. See the full method in how banks calculate loan eligibility.
What counts as an obligation
- Running loan EMIs shown in your credit report.
- Credit card minimum dues, which many banks treat as a monthly obligation.
- Other fixed commitments the bank can verify, such as rent in some cases.
How to lower your FOIR before applying
- Close small loans, even if it uses savings.
- Pay down credit card balances.
- Add a co-applicant with income.
- Choose a longer tenure so the new EMI is smaller.
Check your current obligations in seconds with the credit report analyzer, then read the home loan page and PNB’s page.
Frequently Asked Questions
What is a good FOIR for a home loan?
Lower is better. Banks often allow 40-60%, but staying nearer 35-40% leaves a comfortable margin.
Is FOIR the same as debt-to-income ratio?
They are very close. FOIR is the term Indian banks commonly use for total fixed obligations as a share of income.
Do banks include the new EMI in FOIR?
Yes. The test is whether existing obligations plus the new EMI stay within the permitted ratio.
Does FOIR use gross or net income?
It depends on the bank. Many use net monthly income, so check which one your lender applies.
Useful free tools
- Free Credit Analyzer — Upload your CIBIL report and see which loans you may be eligible for, with an indicative EMI.
- Check my Loan Eligibility — Answer a few questions and see how your application would be routed to a PSU bank.
- Home Loan Balance Transfer Calculator — Compare your current EMI with a lower-rate loan over the same remaining tenure.
- Credit Score Enhancer — Practical steps to improve your CIBIL score before you apply for a loan.
Ready to check your eligibility?
No fee to apply. CIBIL score of 700 or above required.