How Loan Eligibility Is Estimated
Loan eligibility is an estimate of the principal that may fit within a monthly repayment limit. This calculator combines the entered monthly income, subtracts existing fixed obligations from the selected FOIR capacity, and converts the available EMI into a principal using the reducing-balance loan formula.
Available EMI capacity
(Monthly Income × FOIR Limit) − Existing Obligations
Current FOIR
Existing Monthly Obligations ÷ Monthly Income × 100
FOIR means Fixed Obligations to Income Ratio. Some lenders use related debt-to-income measures, but the accepted income, obligations, and maximum ratio can vary. The limit in this tool is editable so you can model the lender's actual criteria.
What Can Affect Actual Loan Approval?
Monthly affordability is only one part of underwriting. Depending on the lender and product, the final decision and sanctioned amount can also depend on:
- Credit history, repayment record, and lender credit assessment
- Age at application and at the end of the proposed tenure
- Employment, profession, business stability, and income continuity
- Income documents and the portion of income the lender accepts
- Existing debts, guarantees, and recurring financial obligations
- Property, vehicle, course, collateral, or loan-to-value checks
- Interest-rate type, product limits, fees, and lender policy
- Co-applicant eligibility, relationship, income, and liabilities
Single and Joint Applicant Planning
A joint application may increase the income available for affordability assessment, but it also brings the co-applicant's obligations into the lender's review. Add only income that is stable, documentable, and likely to be accepted. Enter combined existing EMIs and fixed obligations for a more conservative scenario.
For a target loan, the planner calculates the proposed EMI, projected FOIR, estimated minimum monthly income, total interest, total repayment, and a year-by-year amortization summary. The eligibility surplus or shortfall compares that target with the estimate; it does not guarantee a lender outcome.
Why Use the Interest-Rate Stress Test?
A higher interest rate supports a smaller principal at the same EMI. The stress test adds your chosen number of percentage points to the entered rate and recalculates eligibility. This can help you compare a comfortable scenario with a more cautious one, especially when considering a floating-rate loan.
Longer tenure is not automatically cheaper
Extending tenure usually reduces EMI and may increase estimated eligibility, but it can increase total interest. Compare the monthly payment, total repayment, and amortization—not only the eligible principal.
What to Check in a Loan Offer
Compare the lender's Key Facts Statement where applicable. Review the Annual Percentage Rate (APR), fees and charges, fixed or floating rate, repayment schedule, late-payment consequences, prepayment terms, security requirements, and the total amount payable. APR can provide a broader view of borrowing cost than the interest rate alone.
Important: This Is an Estimate, Not Financial Advice
This calculator does not assess creditworthiness or provide a loan offer, pre-approval, sanction, recommendation, or guarantee. Preset values are illustrative and are not current market rates. Confirm eligibility, rate, APR, fees, repayment terms, and risks directly with a regulated lender before making a borrowing decision.