1. The FOIR Underwriting Ratio
Underwriters commonly evaluate debt capacity using the Fixed Obligation to Income Ratio (FOIR). Many Indian lending institutions permit approximately 40% to 65% of net monthly income to be committed toward total monthly debt obligations, though acceptable ratios vary significantly by lender, income slab, and credit profile.
Key Takeaway: Your maximum loan capacity equals your disposable EMI margin reversed through the EMI formula.