What is FOIR and Why It Affects Your Loan Eligibility
Two applicants with the same income can get very different loan offers. FOIR — what's already committed to fixed obligations — is often why.
What is FOIR?
FOIR, or Fixed Obligation to Income Ratio, is the share of monthly income already committed to fixed obligations — existing EMIs, rent, and similar recurring commitments — before a new loan is even considered. Lenders use it to work out how much of a new EMI a borrower can realistically take on.
Why it matters
- Applying for a new loan while already repaying existing loans.
- Understanding why eligibility can be lower than expected despite healthy income.
- A factor distinct from credit score, income level, or the interest rate on offer.
A worked example
Consider someone earning ₹80,000 a month with ₹15,000 in existing EMI obligations.
| Metric | Value |
|---|---|
| Net monthly income | ₹80,000.00 |
| Existing monthly EMI | ₹15,000.00 |
| FOIR band | Standard (50%) |
| Maximum eligible EMI | ₹25,000.00 |
| Maximum eligible loan amount | ₹28,80,771.00 |
Try your own income, existing EMIs, and FOIR band in the Home Loan Eligibility Calculator.
How the FOIR band changes the outcome
For the same income and existing EMI, the calculator's three FOIR bands produce different eligible amounts: Conservative assumes 40% of income can go to EMIs, Standard assumes 50%, and Aggressive assumes 60%.
| FOIR band | Max eligible EMI | Max eligible loan amount |
|---|---|---|
| Conservative (40%) | ₹17,000.00 | ₹19,58,924.28 |
| Standard (50%) | ₹25,000.00 | ₹28,80,771.00 |
| Aggressive (60%) | ₹33,000.00 | ₹38,02,617.71 |
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Frequently asked questions
What's a 'good' FOIR?
Lower is generally better; many lenders look for FOIR below roughly 40-50%, though thresholds vary by lender and income level.
Does FOIR include rent?
Often yes, along with existing EMIs and other regular fixed commitments — the exact inclusions can vary by lender.
Can I improve my FOIR before applying?
Paying down or closing existing loans, or increasing income, both improve FOIR before a new application.