Every loan applicant in India focuses obsessively on their CIBIL score — and rightly so. But there is another critical metric that lenders evaluate simultaneously, one that causes thousands of loan rejections each month despite excellent credit scores: the FOIR.
What Is FOIR (Fixed Obligation to Income Ratio)?
FOIR — Fixed Obligation to Income Ratio — is India's version of the internationally known Debt-to-Income (DTI) ratio. It measures what percentage of your gross monthly income is already committed to fixed debt repayments: EMIs on existing loans, credit card minimum dues, and any other regular obligations.
FOIR Formula
FOIR = (Total Monthly Fixed Obligations ÷ Gross Monthly Income) × 100
Example: Monthly income ₹1,00,000 | Home loan EMI ₹18,000 | Car loan EMI ₹8,000 | CC minimum due ₹3,000
FOIR = (29,000 ÷ 1,00,000) × 100 = 29% — healthy, can take additional loans
Why FOIR Can Override a Good CIBIL Score
Your CIBIL score tells lenders how responsibly you've managed debt historically. Your FOIR tells them whether you can actually afford additional debt today. A person with a 780 CIBIL score but 70% FOIR poses a genuine repayment risk — their income is already heavily committed.
Most Indian lenders will automatically reject a loan application if the proposed EMI would push the applicant's FOIR above their threshold — regardless of credit score.
FOIR Thresholds by Lender Type
| Lender Type | Max FOIR (Salaried) | Max FOIR (Self-Employed) |
|---|---|---|
| PSU Banks (SBI, PNB etc.) | 40–50% | 45–55% |
| Private Banks (HDFC, ICICI etc.) | 50–55% | 50–60% |
| Housing Finance Companies | 55–60% | 55–65% |
| NBFCs | 60–65% | 60–70% |
6 Ways to Improve Your FOIR Before Applying
- Close smaller personal loans or vehicle loans before applying for a home loan
- Pay off credit card balances — minimum dues count as fixed obligations
- Add spouse or parent as co-applicant to increase total eligible income
- Apply after an annual increment or bonus that increases your documented income
- Request loan tenure extension on existing loans to reduce current EMI amounts
- Avoid taking new loans or credit cards in the 6 months before a major loan application