LoanCheckup

Eligibility3 min read · Updated 17 October 2026

Home loan eligibility: how banks decide how much to lend you

The checks lenders run before approving a home loan: income and FOIR, credit score, age, job and property. A worked example and what to fix before you apply.

The five checks

  1. Income and FOIR. All your monthly loan payments, including the new EMI, are compared with your gross monthly income.
  2. Credit score and history. A higher score gets approval and a lower rate. Late payments, settled accounts and many recent applications count against you.
  3. Age and job. Lenders usually want the loan to end by about retirement age, and prefer stable employment or business history.
  4. The property. The lender's lawyer checks the title and its valuer fixes the value.
  5. Loan-to-value (LTV). RBI caps the loan at a share of the property value. See LTV and down payment.

FOIR: the number that matters most

FOIR is the fixed obligations to income ratio: total monthly loan obligations divided by gross monthly income. Obligations include EMIs on home, car and personal loans, and card payments. Lenders differ, but below 40% is generally seen as healthy and up to 50% may be accepted by some banks.

Worked example. Income ₹60,000 a month. Other EMIs ₹8,000. At a 50% limit, total EMIs can reach ₹30,000, so the new EMI can be about ₹22,000. At 8.5% over 20 years, that EMI repays about ₹25.4 lakh. The affordability tool does this with your own numbers.

Credit score and report

Most lenders want a score of 700 or more, and the best rates go to higher scores. A score is built from your report, so errors in it can cost you. See what score gets the best rate and how to fix an error.

What to do before you apply

  • Close small loans and pay card dues in full.
  • Do not apply to many lenders at once. Each application leaves an enquiry on your report.
  • Add a co-applicant with income if the property will be co-owned.
  • Collect your documents. See the document checklist.
  • Get a pre-approval or an indicative offer so you know your limit before you pay a token amount for a home.

Common questions

What is FOIR in a home loan?

It is your total monthly loan payments divided by your gross monthly income. Lenders use it to judge how much more EMI you can carry.

What FOIR do banks allow for a home loan?

It varies by lender and income. Below 40% is generally seen as healthy, and 40 to 50% may be accepted by some banks. Above 50% is high risk.

Does my age affect home loan eligibility?

Yes. Lenders usually want the loan to end by about retirement age, so a younger borrower can often get a longer tenure and a bigger loan.

Can I get a home loan with a low credit score?

It is harder and the rate is higher. Fix report errors and clear dues first, then apply again after your score improves.

Sources

Published 17 October 2026. Estimates only, not financial advice. Check rates, fees and rules with your lender.