Know your budget? Find the maximum loan you can take. Have a loan amount? Calculate your EMI instantly. Works for all loan types.
EMI → Max Loan Loan → EMI Total Interest & Cost Amortisation Table
By Aditya GuptaAccounting & Finance EducatorLast reviewed May 31, 2026Source: RBI
About this converter
This converter answers two related questions: “What’s the maximum loan I can afford?” and “What’s my EMI on a given loan?” Both directions use the standard reducing-balance EMI formula. Useful for home, car, personal, and education loans.
The banker’s rule of thumb in India: total EMI commitments should not exceed 40-50% of net monthly income (FOIR — Fixed Obligation to Income Ratio). On a ₹1 lakh take-home, that’s ₹40,000-50,000 in EMIs. Existing EMIs eat into this cap. At 8.5% interest over 20 years, every ₹1,000 of EMI supports roughly ₹1.15 lakh of home loan principal — so a ₹40,000 EMI affords roughly ₹46 lakh of loan.
Three calibration points: HDFC and SBI typically approve up to 50% FOIR for salaried customers above ₹1 lakh/month; PSU banks tend to cap at 45%. For self-employed, the income is averaged from the last 2-3 years of ITR, and the FOIR is usually 40%. For RBI-mandated stress tests, lenders simulate a 2% rate hike — if the EMI at the stressed rate exceeds 60% of income, the loan is rejected.
Frequently Asked Questions
How is loan amount derived from a target EMI?
Use the EMI formula backwards: Loan = EMI × [(1+r)^n − 1] / [r × (1+r)^n], where r = monthly rate and n = number of months. The converter computes this for you.
What EMI can I afford on my salary?
Banks approve EMI up to 40-50% of net monthly income. On ₹1 lakh/month take-home, that’s ₹40,000-50,000 EMI max — supporting roughly ₹50-60 lakh home loan at 8.5% for 20 years.
Does my existing EMI reduce the new loan I can get?
Yes — banks calculate Fixed Obligation to Income Ratio (FOIR). Existing EMIs (car, credit card, personal loan) subtract from the 40-50% cap available for a new home loan.
How do tenure changes affect the loan amount?
Longer tenure = higher loan amount for the same EMI but much higher total interest paid. Doubling tenure from 10 to 20 years roughly doubles the loan amount supported but triples total interest.
What’s a comfortable EMI ratio for retirement?
If you’re within 10 years of retirement, keep total EMIs under 30% of income. Beyond 50, ideally under 20%, since income may flatten before EMIs end.
Affordable Monthly EMI (₹)
Interest Rate (% p.a.)
Loan Tenure
Tenure Unit
Loan Amount (₹)
Interest Rate (% p.a.)
Loan Tenure
Tenure Unit
Year-wise Amortisation
Year
EMI Paid
Principal
Interest
Balance
Formula
EMI = P × r(1+r)^n / [(1+r)^n − 1] [r = monthly rate, n = months]
Max Loan = EMI × [(1+r)^n − 1] / [r(1+r)^n]
The standard rule for home loans in India: keep total EMI (all loans) under 40–50% of monthly take-home salary. For a ₹1L salary, total EMIs should not exceed ₹40,000–₹50,000. This converter helps you reverse-engineer the maximum loan you can service.
EMI & Loan — FAQ
What is the 40% EMI thumb rule?
Most Indian banks and lenders use a 40–50% FOIR (Fixed Obligation to Income Ratio) rule: your total monthly EMIs (all loans combined) should not exceed 40–50% of your gross monthly income. For a ₹1L salary, this means a max EMI of ₹40,000–₹50,000.
How does prepayment reduce my loan?
Extra payments go directly to reducing the principal, which cuts future interest. Even one extra EMI per year can reduce a 20-year home loan by 3–4 years. Home loans (floating rate) have no prepayment penalty. Fixed-rate personal/vehicle loans may have a 2–5% prepayment charge.
Is home loan interest tax-deductible?
Yes, in the old tax regime: Section 24B allows deduction up to ₹2L p.a. on interest for self-occupied property. Section 80C allows up to ₹1.5L on principal repayment. In the new tax regime, these deductions are not available except for let-out properties (no cap on interest under Section 24B).
