BankPulse Academy

What is the difference between FOIR (Fixed Obligation to Income Ratio) and INIR (Instalment to Net Income Ratio)?

FOIR (Fixed Obligation to Income Ratio) counts every fixed monthly payment against income. INIR (Instalment to Net Income Ratio) counts only the new instalment against take-home income.

Written 07 September 2026. For bankers in India.

In one line

FOIR asks: with all his EMIs and dues, can he still pay this new EMI? INIR asks: can his take-home salary carry this one EMI?

Why it matters to you

Two answers from one file. The same borrower can pass one ratio and fail the other.
Different income. FOIR often uses gross income; INIR uses net take-home. The income used changes the answer.
Different dues. FOIR adds existing EMIs and card dues; INIR ignores them.
Your bank picks. Some banks run one, some run both. The credit policy says which one limits the loan.
What goes wrong. Run only INIR, and a borrower with three loans looks safe when he is not.

How it works

The two ratios share one shape: a payment divided by an income, times 100. They differ in what goes on top and what goes below.

Item	FOIR	INIR
Payments counted	Existing EMIs, new EMI, card dues, sometimes rent	New EMI only
Income used	Gross at some banks, net at others	Net take-home
Question answered	Can he carry all his dues?	Can this salary carry this EMI?
Common users	Banks and NBFCs, all retail loans	Housing finance companies, mortgage desks
Caps seen	40 to 60 per cent, higher at high income	30 to 50 per cent

In symbols:

FOIR = (Existing EMIs + New EMI + Other fixed dues) / Monthly income x 100.
INIR = New EMI / Net monthly income x 100.

What each word means:

Existing EMIs. EMIs on every loan still running, from the credit bureau report.
New EMI. The instalment of the loan being applied for.
Other fixed dues. Credit card dues; at some banks rent and insurance premiums.
Monthly income. Gross or net, as your bank's policy says.
Net monthly income. Take-home pay after tax, Provident Fund and professional tax.

Why a lender picks one or the other

This is the BankPulse reading of the reasons. Your bank's policy states its own.

INIR first, at a mortgage desk. It is quick. It fixes a loan amount from the salary slip alone.
FOIR for the final decision. It catches other loans. It is the ratio most bank pages describe.
Net income for INIR. Take-home pay is what actually reaches the account each month.
Gross income for FOIR at some banks. A larger income figure goes with a higher cap. Policy sets both.
Both, at careful desks. One ratio checks the salary; the other checks the total loans. The loan must pass both.

The FOIR page and the INIR page give the full detail on each.

Worked examples

All EMIs use the standard formula: E = P x r x (1+r)^n / ((1+r)^n - 1). Here P is the loan and n is the number of months. And r is the yearly rate divided by 12, then by 100.

One borrower runs through both examples. Gross monthly salary Rs 1,00,000; net take-home Rs 80,000 after tax and Provident Fund.

The bank's policy, for this example only, is as follows. INIR cap: 40 per cent of net income. FOIR cap: 55 per cent of gross income.

Example 1: he passes INIR but fails FOIR

Existing personal loan EMI: Rs 16,000. Existing car loan EMI: Rs 12,000. Total existing EMIs: Rs 28,000.
He asks for a home loan of Rs 35 lakh at 8.5 per cent for 20 years.
EMI on Rs 35 lakh: Rs 30,374.

INIR = Rs 30,374 / Rs 80,000 x 100 = 38.0 per cent. Under the 40 per cent cap. Pass.

FOIR = (Rs 28,000 + Rs 30,374) / Rs 1,00,000 x 100 = 58.4 per cent. Over the 55 per cent cap. Fail.

Why the split: INIR never saw the Rs 28,000 of old EMIs. FOIR did.

What each ratio would allow:

Ratio	Room for new EMI	Largest loan
INIR at 40 per cent	Rs 32,000	about Rs 36.87 lakh
FOIR at 55 per cent	Rs 27,000	about Rs 31.11 lakh

A bank that runs both sanctions at most about Rs 31.11 lakh. The lower answer is the limit.

Example 2: he passes FOIR but fails INIR

He closes both old loans. Existing EMIs: none.
He now asks for Rs 50 lakh at 8.5 per cent for 20 years.
EMI on Rs 50 lakh: Rs 43,391.

FOIR = Rs 43,391 / Rs 1,00,000 x 100 = 43.4 per cent. Under the 55 per cent cap. Pass.

INIR = Rs 43,391 / Rs 80,000 x 100 = 54.2 per cent. Over the 40 per cent cap. Fail.

Why the split: FOIR here uses a larger income figure and a higher cap. INIR on net income is tighter for one large EMI.

Under this bank's policy the INIR cap is the limit. The largest loan is about Rs 36.87 lakh, from Rs 32,000 of room.

What the two examples teach

Old loans hurt FOIR, not INIR.
A large single EMI on a smaller take-home hurts INIR, not FOIR on gross.
The sanction limit is always the lower of the two answers, plus the loan-to-value cap on the property.

What the rule says

NO RBI NUMBER. The Reserve Bank of India does not fix FOIR, INIR or any instalment-to-income ratio for these loans. That covers housing loans, personal loans and loan against property. Each bank sets these in its own credit policy.

We checked these documents on 7 September 2026:

The Master Circular on Housing Finance of 1 April 2025 fixes loan-to-value limits in section 3. No income ratio.
The Housing Finance Companies Directions, 2025 fix loan-to-value limits in paragraph 58. No income ratio.
Searches on rbi.org.in for FOIR, INIR, IIR (Instalment to Income Ratio) and instalment to income ratio found nothing.

RBI RULE for microfinance loans only. Paragraph 5.1 of the Microfinance Loans Directions, 2022 caps a low-income household's total monthly loan repayments. The cap is 50 per cent of monthly household income. Paragraph 5.2 counts every loan of the household. In shape, this is a FOIR on household income, not an INIR.

BANK PRACTICE. On 7 September 2026, bank pages describe FOIR caps of 40 to 55 per cent. Some go to 60 and beyond at high incomes. Pages on IIR, the public term closest to INIR, give 30 to 50 per cent. Your bank's policy decides.

BANKPULSE VIEW. Run both. INIR is fast and FOIR is complete. A file that passes both is a file you can defend.

Common mistakes

Reporting one ratio as the other. Write the name and the formula in the note. Never mix them up.
Mixing income bases. FOIR on gross and INIR on net are not comparable numbers. Compare each with its own cap.
Assuming a pass on INIR means a pass on FOIR. Example 1 shows why not.
Assuming a pass on FOIR means a pass on INIR. Example 2 shows why not.
Forgetting loan-to-value. Both ratios test income. The property value is a separate check.
Trusting labels across banks. One bank's ratio of EMI to NMI (Net Monthly Income) counts all EMIs; another's counts one.

How to use it at your desk

Open your bank's credit policy. Find every income ratio it names. Write down each formula.
For each ratio, note the income base: gross or net, and which deductions.
For each ratio, note the payments counted: new EMI only, or all EMIs, cards, rent and guarantees.
Note the cap for each income band. Note which ratio limits the loan when the two disagree.
On the file, compute every ratio the policy names. Show the numbers.
Take the lowest loan amount from all the ratios and the loan-to-value cap.
If unsure which ratio your bank means by a name, ask your credit head before the sanction.

Related terms

What is FOIR? (Fixed Obligation to Income Ratio) — The full FOIR page: what counts, which income, market caps.
What is INIR? (Instalment to Net Income Ratio) — The full INIR page: new instalment over net income; the name.
What is LTV? (Loan to Value Ratio) — The third check: LTV caps the loan against the property, not income.
What is own contribution? (Margin money) — What the buyer pays upfront; both ratios test the EMI on the rest.
Housing loan rules — the BankPulse rule page for housing loans.
Personal loan rules — the BankPulse rule page for personal loans.
Housing Finance Companies Directions 2025 — the RBI direction for housing finance companies, on BankPulse.