How Do Banks Calculate Loan Eligibility?
Banks use a metric called FOIR (Fixed Obligation to Income Ratio). Most lenders in India cap FOIR at 50% for standard salaries. This means your total monthly debt payments (including your new home loan, car loans, and credit cards) cannot exceed half of your in-hand salary.
Intelligence Insight: Want a larger loan? The fastest way to increase your eligibility is to clear existing short-term debts (like personal loans or credit card EMIs) before applying. Expanding the tenure to 30 years also marginally increases eligibility, but significantly increases total interest paid.