What is FOIR?

FOIR stands for Fixed Obligation to Income Ratio. It is the parameter considered by bank or lending institute to determine borrower's loan eligibility. As per lending institution's criteria, borrowers should restrict their fixed obligation inclusive of new loan EMI to 60% of their monthly income. For example, if your monthly income is INR. 1, 00, 000 and you have a current loan of INR. 30,000 you are eligible to an EMI of INR. 30,000 only for new loan i.e. ((60% of 1, 00,000)-30,000) = INR. 30,000. P.S. FOIR ratio may vary from bank to bank and from case to case, but on an average it is considered 60%.