Loan eligibility calculator
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Two independent ceilings decide what you can borrow, and the lower one wins. Income sets one through the share of your earnings a lender will let go to debt. A secured loan has a second: the loan-to-value cap on the asset itself. Being told only the first is how people arrive at a bank expecting a loan nobody will approve.
The formula
Maximum instalment = income × the lender's debt limit − your existing payments. Inverting the EMI formula turns that into a principal: P = E·((1+r)ⁿ − 1) ÷ (r·(1+r)ⁿ). For a secured loan the answer is then capped at the asset's value × the loan-to-value ceiling.
A worked example
A $250,000 loan at 8.75% over 20 years:
| Monthly instalment | $2,209 |
|---|---|
| Total interest | $280,225 |
| Total repaid | $530,225 |
| Interest vs loan | 112% |
| Interest in month 1 | $1,823 |
| Interest in the final month | $16 |
What to watch
- Existing loan payments come out of the allowance, not out of your income — which is why clearing one small loan can unlock a disproportionately larger one.
- A longer term raises the amount you qualify for, because it lowers the instalment. It also raises the interest substantially, so it buys approval rather than affordability.
- Credit score moves the debt limit, not the formula. A strong file might get you sixty per cent of income instead of forty, which is a very large difference in principal.
- Co-applicant income is usually added in full, which is the single largest lever available to most borrowers.
The trap
Treating the income-based figure as an approval. If the asset's loan-to-value ceiling is lower, that is your real limit, and no amount of income changes it.
Questions
How much loan can I get on my salary?
Take the share of income your lender allows for debt — typically half — subtract your existing payments, and invert the EMI formula at your rate and term. On $250,000 of income that works out to about $452,637 over twenty years, before any asset ceiling applies.
What is FOIR or DTI?
The same thing under two names: the share of your income that may go to debt service. India calls it the fixed obligation to income ratio, the US and UK call it debt-to-income. Forty to sixty per cent is the usual band, with the higher end reserved for large incomes and strong credit files.
Does a co-applicant increase eligibility?
Usually substantially, because the lender adds both incomes before applying the ratio. It also makes both parties liable for the whole debt, which is worth being clear about before signing.
Rate bands and lending rules on this page were last reviewed on 2026-10-23 and are indicative, not offers. The arithmetic is produced by the same code the calculator runs. Confirm the terms with your own lender before committing; nothing here is financial advice.