Loan affordability calculator: methodology
How we estimate a safe EMI from your take-home pay, commitments and expenses using an illustrative FOIR limit, and the loan amount that EMI supports.
Last reviewed: Reviewed by: ClearRupee Editorial Team
Two limits
FOIR limit. FOIR (fixed obligations to income ratio) is the share of income going to EMIs:
FOIR room = FOIR% × take-home pay − existing EMIs
The default of 50% is illustrative. Lenders set their own limits.
Cash-flow limit. What's left after your commitments and the savings you want to keep:
Cash-flow room = take-home − existing EMIs − rent − essential expenses − savings buffer
Safe EMI and loan amount
Safe EMI = max(0, min(FOIR room, cash-flow room))
Loan = Safe EMI × (1 − (1 + r)^−n) ÷ r (r = monthly rate, n = months)
We show which limit is binding.
This is not eligibility
This is an educational estimate of what fits your budget, not a lender's eligibility decision. Lenders also consider credit history, employer, income stability, age and their own policies.
Privacy
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