Calculate how much loan you can get based on income and expenses. Free loan eligibility calculator with formula, examples, and FAQ.
Before applying for a loan, it is important to know how much you can borrow responsibly. The loan eligibility calculator uses the 40% rule — your total EMI (Equated Monthly Installment) should not exceed 40% of your available income — to estimate the maximum loan amount you can qualify for. This helps you plan your finances and avoid over-borrowing.
Available Income = Monthly Income - Monthly Expenses | Max EMI = Available Income × 0.40 | Loan Amount = Max EMI × [(1+r)^n - 1] / [r × (1+r)^n]The 40% rule is a widely used guideline by banks to ensure borrowers can comfortably repay loans. The loan amount is calculated using the present value of an annuity formula, where r is the monthly interest rate and n is the total number of monthly payments. This determines the principal that can be fully repaid with the max EMI over the loan tenure.
| Input | Output |
|---|---|
| Income: $5,000, Expenses: $2,000, Rate: 8.5%, Tenure: 20 years | Max EMI: $1,200, Loan Amount: $140,937.83 |
| Income: $8,000, Expenses: $3,000, Rate: 7%, Tenure: 25 years | Max EMI: $2,000, Loan Amount: $282,440.77 |
| Income: $4,000, Expenses: $1,500, Rate: 9%, Tenure: 15 years | Max EMI: $1,000, Loan Amount: $98,626.26 |