Simple Definition
FOIR is used by lenders to estimate repayment capacity. It compares existing fixed obligations, such as EMIs, with monthly income.
Why It Matters
A high FOIR can reduce loan eligibility because lenders may feel that too much of your income is already committed.
Example
If your monthly income is ₹60,000 and existing EMIs are ₹24,000, your FOIR is 40%. A lender may use this to decide whether you can take another EMI.
FAQs on FOIR
What is a good FOIR for a loan?
The acceptable FOIR depends on lender policy, income level and loan product, but a lower FOIR usually improves eligibility.
Does FOIR include credit card dues?
Lenders may consider regular credit card obligations or minimum dues while assessing repayment capacity.