What is FOIR (Fixed Obligation to Income Ratio)?
The share of your income that goes to loan EMIs — used by banks to decide how much you can borrow.
FOIR (also called DTI) is your total monthly loan EMIs divided by net income. Banks usually cap it at 40–50%. A lower FOIR means you qualify for a larger loan; existing EMIs reduce your eligibility.
Example
On 100,000 income with a 50% FOIR cap, your EMIs can total 50,000.
How FOIR is calculated
FOIR — the Fixed Obligation to Income Ratio, sometimes called DTI — is your total fixed monthly obligations divided by your net monthly income, as a percent. Obligations include existing loan EMIs, credit-card minimums and the EMI of the new loan you are applying for.
Why lenders use it
FOIR measures how much of your income is already committed, and therefore your capacity to take on more debt. Most lenders cap it around 40–50%: a lower FOIR improves your chances of approval and a better rate, while a high one signals over-extension. Paying down existing debts before applying lowers your FOIR.