Before you fall in love with a new house or car, you need to know exactly how much the bank will actually let you borrow. The EMI Affordability Estimator does exactly that.
How Banks Calculate Affordability
Banks don't just look at how much money you want; they look at your Debt-to-Income (DTI) ratio. Most financial institutions follow the strict rule that your total monthly debt obligations (including the new EMI) should not exceed 40% to 50% of your net monthly income.
The Affordability Logic
Max EMI = (Net Monthly Income x FOIR percentage) - Existing Monthly Obligations
FOIR = Fixed Obligation to Income Ratio (usually capped at 50%)
Why Use an Affordability Estimator?
Applying for a loan and getting rejected damages your credit score (CIBIL). By using an affordability calculator beforehand, you safeguard your credit rating. If your take-home pay is ₹1,00,000 and you already pay ₹15,000 for a car loan, a bank with a 50% FOIR will only allow a maximum new EMI of ₹35,000. Our tool reverse-engineers this to tell you exactly what loan principal you are eligible for!
Step-by-Step Instructions
- Net Monthly Income: Enter your strictly take-home salary after taxes and PF deductions.
- Existing EMIs: Total up any current loans or credit card minimums you are already paying.
- Expected Interest Rate: Enter the current market rate for the type of loan you want.
- Tenure: Enter the duration. The tool will instantly output your Maximum Loan Eligibility and your Maximum Affordable EMI.