FOIR — Fixed Obligation to Income Ratio
The percentage of your monthly income that goes toward fixed loan repayments. Banks typically allow a maximum FOIR of 50–65% for business loans and 75–90% for LRD.
FOIR determines how much of your income is available to service a new loan. Banks calculate FOIR as (all existing EMIs + proposed new EMI) ÷ monthly net income. If your FOIR exceeds the bank's threshold after adding the new EMI, they will either reduce the loan amount or reject the application.
For salaried individuals, banks typically allow 40–50% FOIR. For self-employed and business owners, 50–65% is common. For Lease Rental Discounting (LRD), most banks use 75–90% of net rental income as the eligible EMI.
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