How this calculation works
Work backwards from an assumed income commitment limit to a possible loan amount. The FOIR input allocates a chosen share of monthly income to all loan obligations; existing obligations reduce the room left for the proposed loan. This makes the effect of another EMI visible, but the resulting principal is an affordability scenario, not an approval amount or an official lender limit.
Worked example
This example uses illustrative inputs. Your current result is shown above.
With ₹40,000 monthly income, ₹10,000 existing obligations and 50% FOIR, room for a new EMI is ₹40,000 × 0.50 − ₹10,000 = ₹10,000. At 12% annual reducing-balance interest for one year, that supports an indicative principal of ₹1,12,550.77.
Assumptions and limits
- FOIR is entered by the user and is not a published universal lending rule. Use a consistent monthly-income basis for income and obligations.
- The calculation excludes credit scoring, age limits, collateral, income volatility, fees and lender-specific eligibility tests. Negative available-payment capacity is floored at zero.
Questions people ask
Why does a longer tenure increase the possible amount?
The same payment is spread over more repayment periods. This may increase principal capacity while also increasing the time and total cost of borrowing.
What belongs in existing obligations?
Enter the monthly debt commitments included in the income-limit comparison you are making. Household living costs still need a separate budget even if your chosen FOIR method excludes them.