Formula
affordable EMI = income × share − existing EMIsloan = EMI × (1 − (1 + r)⁻ⁿ) ÷ r
- r — monthly interest rate
- n — number of monthly instalments
Work out the EMI you can carry, then ask what loan that EMI repays over the chosen tenure.
Worked example
Income 1,00,000; 40% limit; 10,000 existing EMIs
- Monthly take-home income
- 100,000
- Existing EMIs and loan payments each month
- 10,000
- Share of income you will allow for all EMIs
- 40 %
- Interest rate per year
- 8.5 %
- Loan tenure
- 20
- Tenure in
- Years
- Currency symbol
- ₹ Rupee (INR)
Estimated maximum loan
₹34,56,925.19
Affordable new EMI: ₹30,000.00
Total repayable over the tenure: ₹72,00,000.00
Total interest: ₹37,43,074.81
How it works
This turns the EMI formula around. Instead of choosing a loan and finding the instalment, you decide how much of your monthly income can go to loan payments, subtract the EMIs you already pay, and the calculator finds the largest loan whose EMI fits in what is left, for the interest rate and tenure you enter.
For example, with an income of 1,00,000, 40% set aside for EMIs and 10,000 of existing EMIs, the room for a new EMI is 30,000. At 8.5% for 20 years that supports a loan of roughly 34,56,000. The table shows how the same EMI supports a larger loan over a longer tenure — at the cost of far more total interest.
The share of income you set aside is your own comfort level; lenders look at your credit history, other obligations and the value of the property as well, so their offer can be lower or higher. Use the EMI Calculator to test a specific loan, the Loan Prepayment Calculator to see how part-payments change it, and CTC to Take-Home Salary Calculator (India) to estimate monthly income from a salary offer.
Assumptions and limits
- Fixed rate and equal monthly instalments over the chosen tenure.
- The income share is your own limit, not a lender's rule or an approval.
- Fees, insurance, down payment and property rules are not included.