What is FOIR and why do lenders use it?

FOIR stands for Fixed Obligation to Income Ratio — the share of your monthly income that goes toward all EMI obligations. Indian banks and NBFCs cap it, usually between 40% and 60%, to ensure borrowers are not over-committed. If your income is ₹1,00,000 and the lender uses a 50% FOIR, your total EMIs (existing plus new) cannot exceed ₹50,000. The lender sizes your new loan from whatever room is left after your existing EMIs. It is the single most important number in a loan decision, which is why this calculator is built around it rather than a simple income multiple.

How is my eligible loan amount calculated?

The calculator first finds your maximum new EMI: monthly income × FOIR, minus your existing EMIs. It then works backwards from that EMI to the principal it can service, using the standard reducing-balance EMI formula with your interest rate and tenure. For example, a ₹50,000 EMI at 16% over 60 months back-solves to about ₹20.5 lakh of principal. That principal is your eligibility. Changing the rate, tenure, or FOIR changes the principal a given EMI can support, which is why all three affect your eligible amount.

Why do business loans have higher interest rates than home loans?

Business loans are usually unsecured or lightly secured, so the lender carries more risk than with a home loan backed by property. That risk is priced into the rate, which is why business loans commonly run 14–20% against 8–9% for home loans. The higher rate also means a given EMI services a smaller principal — so at the same income and FOIR, your business-loan eligibility is lower than your home-loan eligibility would be. The calculator lets you enter the exact rate your lender quotes so the eligibility reflects your real terms.

How can I increase my loan eligibility?

Three levers move eligibility the most. First, reduce existing EMIs — closing a small loan frees FOIR room rupee-for-rupee. Second, choose a longer tenure — it lowers the EMI, so the same FOIR room services a larger principal (though total interest rises). Third, increase assessed income — adding a co-applicant’s income or showing higher verifiable business income raises the FOIR cap itself. You can test each lever in the calculator and watch the eligible amount change before you apply, which is more useful than discovering the limit during a rejected application.

Is the eligibility figure a guarantee of approval?

No. This calculator estimates eligibility using the FOIR method that underlies most lending decisions, but a real sanction also depends on your credit score, business vintage, banking history, documentation, and the specific lender’s policy. Treat the figure as a well-grounded ceiling to plan around, not a promise. It tells you the realistic maximum to ask for, which improves your chances and helps you avoid applying for an amount that would be reduced or rejected. For an actual sanction, the lender’s assessment is final.

Is the income I enter stored anywhere?

No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — income, existing EMIs, rate, or tenure — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. There is no account and no saved history. The figures are informational; for an actual loan, confirm terms with your lender.

Business

Business Loan EMI & Eligibility Calculator

Find the largest business loan you actually qualify for using the FOIR method lenders apply, then see the EMI, total interest, and repayment. Free, in your browser, nothing uploaded.

By the Samastam teamLast updated 2026-06-20Editorial standards

Income & obligations

Monthly income (₹)

₹

Net monthly business income or take-home pay the lender can verify.

Existing EMIs (₹ per month)

₹

Total of all current monthly EMIs. Leave blank if none.

Interest rate (% per year)

Business loans commonly run 14–20%, higher than home loans.

Tenure (months)

FOIR cap: 50%

Lenders cap total EMIs at 40–60% of income. 50% is a common middle.

Your eligibility

Enter your monthly income and tenure on the left. Your eligible loan amount, EMI, and total repayment appear here as you type.

A business loan eligibility calculator works out the largest loan a lender is likely to sanction you, and what it would cost to repay. Indian banks and NBFCs do not lend against income alone — they cap your total monthly EMIs at a fraction of your monthly income using the FOIR (Fixed Obligation to Income Ratio) method, then back-solve the loan amount from the EMI that room can service. Enter your monthly income, existing EMIs, the interest rate, and the tenure, and this tool shows your eligible loan amount, the EMI on it, and the total interest and repayment — all computed in your browser, with nothing sent anywhere.

What this is and why it matters

A business loan eligibility calculator answers the question every borrower actually has before applying: not “what is the EMI on ₹20 lakh?” but “how much will a lender give me in the first place?” The answer turns on the FOIR — the Fixed Obligation to Income Ratio — which is the method nearly every Indian bank and NBFC uses to size a loan. Rather than lending a fixed multiple of income, the lender caps your total monthly EMI obligations, existing plus new, at a fraction of your monthly income. That fraction is typically between 40% and 60%, with 50% a common working figure, and the cap exists to ensure you are not so over-committed that a single bad month pushes you into default.

The mechanics are straightforward once you see them. If you earn ₹1,00,000 a month and the lender applies a 50% FOIR, your total EMIs may not exceed ₹50,000. If you already pay ₹15,000 on a car loan, only ₹35,000 of EMI room remains for the new loan. The lender then works backwards from that ₹35,000 — using the interest rate and the tenure — to the principal that an EMI of ₹35,000 can service. That principal is your eligibility. This is why two people with identical incomes can qualify for very different loan amounts: the one with existing EMIs, a higher rate, or a shorter tenure qualifies for less.

Knowing this figure before you apply matters for more than convenience. A loan application that asks for far more than your FOIR supports is likely to be rejected or reduced, and each hard enquiry can dent your credit score. Going in with a realistic number — or improving it first by closing a small existing loan, choosing a longer tenure, or adding a co-applicant’s income — makes approval smoother and the terms better. The calculator lets you test each of those levers and watch the eligible amount move, so you approach the lender with a number you already know they can support.

How to use this tool

Enter your monthly income. Use your net monthly business income or take-home pay — the figure the lender will assess. For a business, this is typically the average monthly profit or drawings the bank can verify from your statements and returns. The eligibility updates as you type, with nothing submitted anywhere.

Add your existing EMIs. Enter the total of all monthly EMIs you already pay — car loan, home loan, other business loans, credit-card EMIs. These are subtracted from your FOIR room rupee-for-rupee, so they directly reduce the new loan you qualify for. If you have none, leave it at zero.

Set the interest rate and tenure. Business loans usually carry higher rates than home loans — commonly 14% to 20% depending on the lender and your profile. A longer tenure lowers the EMI and so raises the principal your FOIR room can service, but increases total interest. Adjust both to see the trade-off.

Read your eligibility. The tool shows the largest loan you qualify for, the EMI on it, and the total interest and repayment. Adjust the FOIR slider to match a specific lender’s policy, or change your inputs — close an existing EMI, extend the tenure — to see how your eligibility improves before you apply.

Examples and use cases

A ₹1 lakh/month earner with no existing EMIs

A shop owner with ₹1,00,000 of verifiable monthly income and no current EMIs checks eligibility at a 50% FOIR, 16% interest, over 5 years. The FOIR cap allows ₹50,000 of total EMI, all of it available since there are no existing obligations. Working backwards, an EMI of ₹50,000 at 16% over 60 months services a principal of about ₹20.5 lakh — so that is the eligible loan. The tool shows the EMI, and a total repayment of roughly ₹30 lakh, of which about ₹9.5 lakh is interest.

The same income, but with an existing car loan

The same owner already pays ₹20,000 a month on a car loan. Now only ₹30,000 of the ₹50,000 FOIR room remains for a new loan. At the same 16% over 60 months, an EMI of ₹30,000 services about ₹12.3 lakh — the eligible amount drops by roughly ₹8 lakh purely because of the existing EMI. This shows why closing a small loan before applying can meaningfully raise eligibility.

Stretching the tenure to qualify for more

A consultant earning ₹80,000 a month with no existing EMIs wants a larger loan. At a 50% FOIR the EMI room is ₹40,000. Over 3 years at 16% that services about ₹11.3 lakh; stretched to 7 years, the same ₹40,000 EMI services about ₹20.6 lakh. The longer tenure nearly doubles eligibility — but the calculator also shows the total interest rising sharply, the cost of borrowing more for longer.

An over-committed borrower

A trader earning ₹50,000 a month already pays ₹30,000 in EMIs. At a 50% FOIR the cap is ₹25,000 — already exceeded by the existing ₹30,000. The calculator returns zero eligibility, correctly reflecting that no responsible lender would add a new EMI here. The borrower would need to clear existing debt or increase income before qualifying, which the tool makes obvious at a glance.

Frequently asked questions

What is FOIR and why do lenders use it?: FOIR stands for Fixed Obligation to Income Ratio — the share of your monthly income that goes toward all EMI obligations. Indian banks and NBFCs cap it, usually between 40% and 60%, to ensure borrowers are not over-committed. If your income is ₹1,00,000 and the lender uses a 50% FOIR, your total EMIs (existing plus new) cannot exceed ₹50,000. The lender sizes your new loan from whatever room is left after your existing EMIs. It is the single most important number in a loan decision, which is why this calculator is built around it rather than a simple income multiple.
How is my eligible loan amount calculated?: The calculator first finds your maximum new EMI: monthly income × FOIR, minus your existing EMIs. It then works backwards from that EMI to the principal it can service, using the standard reducing-balance EMI formula with your interest rate and tenure. For example, a ₹50,000 EMI at 16% over 60 months back-solves to about ₹20.5 lakh of principal. That principal is your eligibility. Changing the rate, tenure, or FOIR changes the principal a given EMI can support, which is why all three affect your eligible amount.
Why do business loans have higher interest rates than home loans?: Business loans are usually unsecured or lightly secured, so the lender carries more risk than with a home loan backed by property. That risk is priced into the rate, which is why business loans commonly run 14–20% against 8–9% for home loans. The higher rate also means a given EMI services a smaller principal — so at the same income and FOIR, your business-loan eligibility is lower than your home-loan eligibility would be. The calculator lets you enter the exact rate your lender quotes so the eligibility reflects your real terms.
How can I increase my loan eligibility?: Three levers move eligibility the most. First, reduce existing EMIs — closing a small loan frees FOIR room rupee-for-rupee. Second, choose a longer tenure — it lowers the EMI, so the same FOIR room services a larger principal (though total interest rises). Third, increase assessed income — adding a co-applicant’s income or showing higher verifiable business income raises the FOIR cap itself. You can test each lever in the calculator and watch the eligible amount change before you apply, which is more useful than discovering the limit during a rejected application.
Is the eligibility figure a guarantee of approval?: No. This calculator estimates eligibility using the FOIR method that underlies most lending decisions, but a real sanction also depends on your credit score, business vintage, banking history, documentation, and the specific lender’s policy. Treat the figure as a well-grounded ceiling to plan around, not a promise. It tells you the realistic maximum to ask for, which improves your chances and helps you avoid applying for an amount that would be reduced or rejected. For an actual sanction, the lender’s assessment is final.
Is the income I enter stored anywhere?: No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — income, existing EMIs, rate, or tenure — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. There is no account and no saved history. The figures are informational; for an actual loan, confirm terms with your lender.