The right question before any loan is not "how much can I get?" but "how much EMI can I pay every month without stress — even in a bad month?" Here's a simple way to answer it.
Step 1: Start from take-home income
Use the money that actually reaches your account — salary after deductions, or the average monthly profit your business leaves you, not turnover.
Step 2: Subtract essential expenses
Rent, groceries, utilities, school fees, insurance premiums, transport, support for family. Be honest; underestimating expenses is how EMIs become a burden.
Step 3: Keep savings and a buffer
Set aside something for savings and an emergency fund before counting what's left for EMIs.
Step 4: Check the FOIR
Lenders look at your fixed obligations to income ratio (FOIR) — all EMIs as a share of income. Many lenders allow somewhere around 40–60%, depending on income level and policy. That is the lender's ceiling, not a target: a comfortable household budget often keeps total EMIs well below it.
A worked example
| Amount per month | |
|---|---|
| Take-home income | ₹70,000 |
| Essential expenses | ₹32,000 |
| Savings and buffer | ₹10,000 |
| Existing EMIs | ₹6,000 |
| Room for a new EMI | ₹22,000 |
Total EMIs would be ₹28,000 — 40% of income — inside most lenders' limits and inside this household's budget. Use the loan eligibility calculator to see what loan a ₹22,000 EMI can support, and the EMI calculator to fit the amount and tenure. For common amounts, the EMI tables are ready: ₹50,000, ₹2 lakh and all personal loan amounts.
Signs an EMI is too high
- You'd need to use a credit card for regular expenses after paying it.
- One delayed salary or slow business month would mean a missed EMI.
- There's nothing left to save.
- You'd need another loan to pay this one.
Ways to bring the EMI down
- Borrow less — use some savings for part of the cost.
- Choose a longer tenure (it costs more interest in total).
- Clear a small existing loan first.
- Improve your credit score to qualify for better terms.
For a business, plan the EMI for your slowest months, not your best — read working capital vs term loan.
This guide is general information, not financial advice. Interest rates, fees, eligibility and other terms are set by each lender and can change; the figures in examples are illustrative only. Oxon Fintech is a loan facilitation platform, not a lender — loans are sanctioned and disbursed by our lending partners.