Estimate an affordable loan amount based on your monthly income and a target EMI-to-income ratio.
Your affordable EMI is calculated as a percentage of your income.
That EMI is then converted into a loan amount using the reverse EMI formula.
Affordable EMI: Monthly income × EMI-to-income ratio
Loan amount: Reverse EMI formula on the affordable EMI
What EMI-to-income ratio do lenders typically use?
Many lenders keep your total EMIs (including your other loans) at 40-50% of your monthly income. This is sometimes called FOIR (Fixed Obligation to Income Ratio).