Free Loan Eligibility Calculator
Before applying, use this tool to estimate the maximum loan amount a lender is likely to approve for you. It uses the standard FOIR (Fixed Obligation to Income Ratio) approach that most banks apply.
Results
Assumes 45% of income can go to total loan payments (existing + new). Adjust the slider to match your lender's FOIR policy.
Disclaimer: This calculator provides estimates only and does not constitute financial advice. Actual loan terms may vary by lender.
What the Loan Eligibility Calculator does
Loan eligibility estimates the maximum amount a lender is likely to approve based on the share of monthly income already committed to debt. It applies the fixed-obligation-to-income approach most retail and business lenders use to cap total debt exposure.
Methodology and formula
Maximum affordable monthly payment = (Monthly Income x Affordability %) - Existing Monthly Debt Payments; Maximum Loan Amount is then derived by reverse-solving the amortization formula P x R x (1+R)^N / [(1+R)^N - 1] for that monthly payment.
Worked example
- Inputs
- Monthly income 5,000; existing debt payments 500; affordability cap 45%; rate 10%; term 5 years.
- Result
- Maximum affordable payment 1,750; maximum eligible loan amount approximately 83,000.
Raising the affordability cap or adding a co-applicant's income both increase the maximum eligible amount, but lenders will still weigh credit history and collateral before final approval.
When to use this tool
Use this before shopping for a loan to know your realistic ceiling. Use the Debt-to-Income Calculator to see the underlying ratio a lender will scrutinize, and the Business Loan Calculator once you know the amount you want to borrow.
About the Loan Eligibility Calculator
How eligibility is calculated
Maximum eligible monthly payment = (Monthly Income × FOIR%) − Existing Monthly Debt Payments. Maximum loan amount is then derived by reverse-solving the monthly payment formula for your desired rate and tenure. The default FOIR of 45% mirrors most Indian and US retail lenders; adjust the slider to match your lender's policy.
Why lenders cap at FOIR
Lenders want to be sure you can absorb a rate hike, a bad month or an unexpected expense without missing payments. Capping total obligations at 40–50% of income creates that buffer. Under-declaring existing monthly debt payments to get a bigger loan usually backfires when the lender pulls your credit report.
Levers to increase eligibility
Add a co-applicant to combine incomes, extend tenure (lowers monthly payment but raises total interest), close small existing debts to free up FOIR headroom, or apply to a lender with a higher FOIR ceiling.
Frequently asked questions
What is FOIR?
Does adding a co-applicant help?
Is my eligibility guaranteed?
Related Loan Tools
Other free tools in the loans & financing silo.
Debt-to-Income Calculator
Calculate your DTI ratio from monthly income and all existing debt payments — with a color-coded risk indicator.
Open toolBusiness Loan Calculator
Calculate the monthly payment, total interest and total repayment on a business loan.
Open toolAmortization Schedule Calculator
Generate a full month-by-month amortization table with principal, interest and balance for any loan.
Open tool