Find out the loan amount you could get, based on the EMI you can comfortably afford.
This works backwards from the normal EMI formula — instead of finding the EMI, it finds the loan amount for a fixed EMI, rate, and time.
Principal: EMI × ((1+r)ⁿ − 1) ÷ (r × (1+r)ⁿ)
A loan eligibility calculator runs the EMI formula backwards. Instead of asking what EMI a loan will need, it asks how large a loan a given EMI can support at a certain rate and tenure. You enter the monthly instalment you can manage, the interest rate and the number of months, and it returns the principal that exactly fits.
This mirrors the first step a lender takes when it decides how much to sanction. The bank looks at your income and existing EMIs, decides how much monthly repayment it is comfortable with, and converts that EMI into a maximum loan amount. Doing the same sum yourself tells you, before you visit a branch, roughly what you could be offered and what property, car or course is realistic.
The answer is a mathematical ceiling, not a promise of sanction. Credit score, age, job stability and the lender's own policy can reduce it.
1. Decide the EMI you can pay every month without strain.
2. Convert the annual interest rate to a monthly rate r = annual rate ÷ 12 ÷ 100.
3. Set the tenure n in months.
4. Compute (1 + r)ⁿ.
5. Apply P = EMI × ((1 + r)ⁿ − 1) ÷ (r × (1 + r)ⁿ).
6. Check the result by putting P back into the EMI formula; you should get your EMI again.
The loan a lender will give you equals the present value of the EMIs you promise to pay, discounted at the loan rate. An EMI due in one month is worth EMI ÷ (1 + r) today, one due in two months is worth EMI ÷ (1 + r)², and so on. Summing these n terms gives EMI × (1 − (1 + r)⁻ⁿ) ÷ r, which is the same as the formula used here. So the eligibility figure is simply today's value of your future repayment stream, nothing more.
For a fixed EMI, a lower rate or a longer tenure raises the loan you can support, but not in proportion. Doubling the tenure from 10 to 20 years does not double the loan, because instalments far in the future are discounted heavily. As n grows very large, P approaches EMI ÷ r, the amount whose monthly interest alone equals your EMI. A 1 percentage point rise in rate can cut eligibility on a 20-year loan by about 7%, which is why eligibility shrinks when interest rates go up.
Lenders cap total EMIs at a share of your net monthly income, often called FOIR, and include your existing loans and sometimes credit card dues in that total. They may also limit the tenure so the loan ends before your retirement age, and they lend only a set share of a property's value. Any of these can bring the sanctioned amount below the figure this calculator shows. Treat the result as the upper bound your chosen EMI can carry.
Deepak can set aside ₹30,000 a month for a home loan and has been quoted 8.75% a year for a 20-year tenure of 240 months.
Start from the EMI formula: EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)
Rearrange to solve for P: P = EMI × ((1+r)ⁿ − 1) ÷ (r × (1+r)ⁿ)
Convert the annual rate to a monthly rate: r = 8.75% ÷ 12 ÷ 100 = 0.007292
Substitute your values: P = 30000 × ((1+0.007292)^240 − 1) ÷ (0.007292 × (1+0.007292)^240)
Loan amount you can afford: P
Answer: Estimated loan amount you're eligible for ₹33,94,776
Entering the EMI you hope to pay rather than one that leaves room for existing loans and living costs.
Assuming the bank will sanction this full amount regardless of credit score or retirement age.
Using a promotional teaser rate that will reset higher after the first year or two.
Forgetting that the down payment, stamp duty and registration must come from your own savings.
Estimating a home loan budget before shortlisting flats.
Setting a realistic car or education loan target from a fixed monthly budget.
Seeing how much eligibility falls if interest rates rise by 1%.
Deciding whether adding a co-applicant's EMI capacity is needed for a target loan.
Will a lender actually approve this exact amount?
Not always. This shows the loan amount your chosen EMI can support, mathematically. Your real eligibility also depends on your income, other debts, credit score, and the bank's own rules.