The FOIR Formula Banks Use
FOIR = (All existing EMIs + proposed new EMI) ÷ Net monthly income × 100
Banks want FOIR ≤ 40–50% for home loans, 50–55% for car loans.
| Net Income | FOIR Limit (50%) | Existing EMI | Max New Loan EMI | Home Loan Eligibility (8.5%, 20yr) |
|---|---|---|---|---|
| ₹50,000 | ₹25,000 | ₹0 | ₹25,000 | ~₹25 lakh |
| ₹80,000 | ₹40,000 | ₹10,000 | ₹30,000 | ~₹31 lakh |
| ₹1,20,000 | ₹60,000 | ₹15,000 | ₹45,000 | ~₹46 lakh |
| ₹2,00,000 | ₹1,00,000 | ₹20,000 | ₹80,000 | ~₹82 lakh |
Income Types Banks Consider
| Income Type | % Counted | Notes |
|---|---|---|
| Net take-home salary | 100% | Core income for FOIR |
| Variable salary/bonus | 50–75% | Banks average last 2 years |
| Rental income | 70–80% | Need agreement + bank statements |
| Freelance/consulting | 60–75% | Need 2–3 years ITR |
| Spouse income (co-applicant) | 100% | Adds fully to eligibility |
7 Ways to Increase Your Loan Eligibility
- Add co-applicant: Spouse/parent income doubles eligibility in many cases
- Close existing loans: Pay off car loan or personal loan before applying for home loan
- Increase tenure: 30-year loan vs 20-year: lower EMI → higher eligibility (at the cost of more interest)
- Improve CIBIL to 750+: Better score = lower rate = lower EMI = higher eligibility
- Declare all income: Include rent, freelance, bonus in application
- Reduce credit card limits: Unused credit limits count against you in some bank algorithms
- Apply after salary increment: Wait for next appraisal cycle if hike is coming
Documents for Loan Application
- Identity: Aadhaar + PAN (mandatory)
- Income: Last 3 months salary slips + Form 16 + 6-month bank statement
- Property: Sale agreement / builder allotment letter + property papers
- Employment: Offer letter or employment certificate + 2-year job continuity proof
✅ Check Your Loan Eligibility
Use Eligibility Calculator →Q: Why was my loan rejected even with good CIBIL?
Common reasons beyond CIBIL: high FOIR (too many existing EMIs), unstable employment history (job hops, recent joining), property issue (undivided share, unclear title), income not meeting minimum threshold, age too close to retirement, or employer not on bank's approved company list.
Q: Can I get a home loan with CIBIL score below 650?
Most mainstream banks will reject or offer very high rates. Options: NBFCs (higher rates, more flexible), housing finance companies (LIC HFL, HDFC Ltd), or wait 6–12 months to improve score by clearing dues and reducing credit utilisation below 30%.
⚠️ Educational purposes only. Consult a certified financial or legal advisor for personalised guidance.