What FOIR is
FOIR, the fixed obligation to income ratio, is Indian banks' name for the debt-to-income ratio. It's the share of your monthly income already committed to EMIs and other fixed debt payments. Lenders use it to decide whether you can handle another loan; you can use it to decide whether you should.
FOIR = total monthly EMIs ÷ net monthly income × 100Worked example
How to read your ratio
| FOIR | What it means |
|---|---|
| Under 30% | Healthy. Plenty of room for savings and surprises. |
| 30–40% | Manageable, but think carefully before adding loans. |
| 40–50% | Stretched. Banks may still lend, but one emergency can cause missed payments. |
| Over 50% | Risky. Many banks decline new loans; focus on paying down debt. |
Lowering your FOIR
- Clear small loans and credit card dues first; they often have high EMIs relative to the balance.
- Consolidate expensive debts into one longer, cheaper loan to reduce the monthly outgo (at the cost of more total interest).
- Avoid "no-cost EMI" purchases that quietly add to your fixed obligations.
- Increase income, for example with a co-applicant for a home loan.
See how much a bank might lend at your FOIR on the loan eligibility calculator, or plan your way out with the debt avalanche calculator.
A budget-friendly target
A useful personal rule is to keep all EMIs below 30% of take-home pay, with rent plus EMIs below 50%. That leaves room for a 20% savings rate and everyday costs. If you're planning a home loan, aim to clear car and personal loans first; they usually have shorter tenures and higher EMIs per rupee borrowed, so closing them frees up far more eligibility.
Frequently asked questions
What FOIR do banks accept?
Most banks accept 40–60% of net income, with higher limits for higher earners. A lower FOIR gets faster approvals and better rates.
Are credit card dues included in FOIR?
Yes. Banks usually count 5% of your outstanding card balance as a monthly obligation.
Is rent included?
Banks don't include rent in FOIR, but you should consider it when deciding what you can afford.