What Is a Good FOIR for a Personal Loan? Bank Underwriting Rules
By Pradipta Ray · Published
When you apply for a personal loan, banks do not just look at your CIBIL score; they calculate your Fixed Obligation to Income Ratio (FOIR). Here is how underwriters calculate your FOIR and what ratio guarantees approval.
FOIR (Fixed Obligation to Income Ratio) is the proportion of your monthly income already committed to mandatory debt payments. Underwriters use it to prevent borrowers from taking on more debt than their disposable income can handle.
Direct Answer: A good FOIR for a personal loan is 35% to 40%. For example, if you earn ₹60,000 monthly, your total existing and proposed EMIs should not exceed ₹21,000 to ₹24,000.
FOIR Risk Categories in Indian Banking
| FOIR Range | Risk Assessment | Approval Likelihood | Interest Rate Impact |
|---|---|---|---|
| Below 35% | Low Risk (Prudent) | Instant / Very High | Best rack rates offered |
| 35% to 45% | Moderate Risk (Standard) | High with good CIBIL (750+) | Standard benchmark rates |
| 45% to 55% | High Risk (Stretched) | Requires senior manager approval | Risk premium added (+1% to 3%) |
| Above 55% | Critical Risk (Over-leveraged) | Likely Rejection | Generally declined |
How Credit Cards Distort Your FOIR
Even if you only pay minimum dues on your credit cards, banks treat 5% of your total card balance as an ongoing monthly debt obligation. If you carry a ₹1,00,000 balance, the underwriter adds ₹5,000 to your monthly fixed obligations, instantly consuming a big slice of your FOIR headroom.
Steps to Fix a High FOIR Before Applying
Prepay small, high-EMI consumer loans (such as phone or appliance financing) to remove monthly commitments.
Clear revolving credit card balances at least 30 days prior to applying so the bureau report reflects zero balance.
Do not apply simultaneously to multiple NBFCs, which flags desperate borrowing behavior on your credit record.
Frequently asked questions
What is an ideal FOIR for a personal loan in India?
Does credit card minimum due count towards FOIR?
Can I lower my FOIR before applying for a personal loan?
Calculators for this
Related reading
FOIR is the single ratio that caps how much Indian lenders will sanction. What counts towards it, what does not, and how to move it.
How lenders turn your income into a loan amount, what FOIR means, and what else they check before sanctioning anything.
Find out how much personal loan you can get with a ₹30,000 monthly salary. Learn how FOIR, CIBIL score, and tenure decide your sanction limit.
Authoritative Sources
- Reserve Bank of India Master Circular on Loans and Advances· verified 1 August 2026
- TransUnion CIBIL Underwriting Standards· verified 1 September 2026