Loan Affordability Calculator
Estimate the maximum loan amount you could reasonably afford based on your income and existing obligations — the reverse of an EMI calculator.
This is a planning estimate only, not a lending decision. Actual loan eligibility depends on the lender's own criteria. See our Disclaimer.
How this is calculated
First, the calculator works out how much monthly EMI fits your target debt-to-income ratio, after subtracting any EMIs you're already paying. Then it works the EMI formula backward — the same formula the EMI Calculator uses forward — to find the loan principal that would produce that EMI at your given rate and tenure.
Worked example
On an income of 80,000/month with an existing EMI of 5,000 and a target ratio of 40%, the affordable EMI is (80,000 × 0.4) − 5,000 = 27,000. At 9% interest over 20 years, that supports a loan of roughly 30,00,914.
Why lenders use a debt-to-income ratio
Most lenders cap total EMI obligations (including the new loan) at 40–50% of monthly income, to leave enough for living expenses and reduce default risk. This calculator lets you test different ratios to see how they affect your borrowing power.
How the target ratio changes the answer
Keep the earlier inputs (income 80,000, existing EMI 5,000, 9% interest, 20 years) and vary only the ratio:
- 30% leaves an EMI of 19,000 and supports about 21,11,754.
- 35% leaves an EMI of 23,000 and supports about 25,56,334.
- 40% leaves an EMI of 27,000 and supports about 30,00,914.
How tenure and existing EMIs change it
At the 40% ratio, a 15-year tenure supports about 26,62,022, a 20-year tenure 30,00,914 and a 25-year tenure 32,17,364. A longer tenure raises the loan you can carry but also means paying interest for more years. With no existing EMI at all, the same 20-year case allows an EMI of 32,000 and a loan of about 35,56,639.
What the estimate does not include
- Processing fees, insurance and other charges added to the loan.
- The down payment and the price of the property or vehicle, which are separate from the loan amount.
- A rate that changes during the tenure on a floating-rate loan.
- Your credit history and the lender's own valuation, which decide what is actually approved.
Guides
- Flat vs Reducing Rate: How EMI Really Works — Why two loan quotes with the same headline rate can cost very different amounts: how flat and reducing-balance rates convert, where each EMI goes, and what prepaying changes.
- How Lenders Size a Mortgage: DTI, Rate, Term — How debt-to-income limits turn your income into a maximum payment, and how rate, term, existing debts and down payment change the loan you can get.
Frequently asked questions
Is this the amount a bank will actually approve?
No — this is a planning estimate. Actual approval depends on the lender's specific policies, your credit history, existing liabilities, and other factors this calculator doesn't have access to.
What ratio should I use?
40% is a commonly used benchmark, but more conservative planners often use 30–35% to keep more room in the monthly budget. Try a few ratios to see the range.