Banks don't lend a fixed multiple of your salary. They look at how much EMI you can comfortably pay each month, then work out the loan that EMI can support. Here's how it works, with numbers.
How banks calculate eligibility
Lenders use the FOIR — Fixed Obligation to Income Ratio. Most allow your total EMIs (including existing loans) to be about 40–60% of your net monthly income, depending on how much you earn. The maximum EMI is then converted into a loan amount using the interest rate and tenure.
Eligibility by salary
Assuming 50% FOIR, no existing loans and an 8.5% interest rate:
| Net monthly salary | Max EMI (50%) | Loan for 20 years | Loan for 30 years |
|---|---|---|---|
| ₹30,000 | ₹15,000 | ₹17,28,463 | ₹19,50,805 |
| ₹40,000 | ₹20,000 | ₹23,04,617 | ₹26,01,073 |
| ₹50,000 | ₹25,000 | ₹28,80,771 | ₹32,51,341 |
| ₹75,000 | ₹37,500 | ₹43,21,156 | ₹48,77,012 |
| ₹1,00,000 | ₹50,000 | ₹57,61,542 | ₹65,02,682 |
| ₹1,50,000 | ₹75,000 | ₹86,42,313 | ₹97,54,023 |
| ₹2,00,000 | ₹1,00,000 | ₹1,15,23,084 | ₹1,30,05,364 |
Indicative only. Actual eligibility depends on the lender, your age, credit score, job stability and the property.
Existing EMIs reduce your eligibility
With a ₹1 lakh salary, you could get about ₹57,61,542 over 20 years. If you already pay a ₹10,000 car-loan EMI, that falls to about ₹46,09,234 — a drop of ₹11,52,308. Closing small loans before applying can make a big difference.
How to increase your eligibility
- Add a co-applicant: a working spouse or parent's income is added to yours.
- Choose a longer tenure: if your age allows, 25–30 years supports a bigger loan.
- Improve your credit score: a score above 750 can also get you a lower rate.
- Declare all regular income: rental income or stable variable pay may be considered.
Don't forget the down payment
Banks usually finance 75–90% of the property value, so you'll need 10–25% plus stamp duty and registration charges from your own savings.
Check your own numbers with the home loan eligibility calculator, then plan the EMI with the EMI calculator.