BankPulse Academy

What is INIR? (Instalment to Net Income Ratio)

INIR (Instalment to Net Income Ratio) is the new loan's monthly instalment as a share of the borrower's take-home income.

Written 07 September 2026. For bankers in India.

In one line

INIR divides the EMI of the loan being asked for by the borrower's monthly take-home income. It answers one question: can this salary carry this one EMI?

Why it matters to you

Who uses it. Housing loan and loan against property desks, at banks and housing finance companies.
When. At the eligibility stage, to fix the loan amount from the borrower's take-home pay.
What it decides. The largest EMI, and so the largest loan, for a given net income.
What goes wrong. Use gross income by mistake, and you allow a bigger EMI than the salary can pay.
Its limit. INIR ignores other loans. A borrower can pass INIR and still have more EMIs than he can pay.

How it works

A note on the name first. Public bank pages rarely print the word INIR. We searched bank, NBFC, housing finance company and training pages and found none that spells it out. The closest public term is IIR (Instalment to Income Ratio), which housing finance companies use widely.

INIR is the same idea with the income fixed as net income, as the name says. We could not confirm the expansion from an official or bank source. Treat it as the common reading until your bank's policy confirms it.

The steps:

Find the borrower's net monthly income. This is take-home pay after tax, Provident Fund and professional tax.
Compute the EMI of the loan being asked for, at the proposed rate and tenure (repayment period).
Divide the EMI by the net income. Multiply by 100.
Compare with the cap in your bank's credit policy for that income band.

An income band is a range of income, such as Rs 5 lakh to Rs 10 lakh a year. Caps usually differ by band.

In words: INIR equals the new instalment divided by net monthly income, times 100.

In symbols: INIR = New EMI / Net monthly income x 100.

What each word means:

New EMI. The instalment of the loan being applied for. Not the borrower's other EMIs.
Net monthly income. Gross salary minus income tax, Provident Fund, professional tax and other salary deductions.
Cap. The highest INIR your bank allows. It usually rises with income.

Why lenders look at one instalment only

Housing finance companies often fix the loan amount from the salary first. The HDFC Bank eligibility page explains the idea behind IIR. It assumes about half of income goes to regular living costs. The rest can go to the loan. The same page says FOIR (Fixed Obligation to Income Ratio) then adds the instalments of all other loans.

So INIR or IIR is the first test. FOIR is the full check.

Names that overlap

IIR (Instalment to Income Ratio). The same ratio on gross or net income. Used by housing finance companies.
NMI (Net Monthly Income). State Bank of India's term for take-home pay. Its ratio is called EMI/NMI.
One source says the EMI in EMI/NMI includes existing EMIs. If so, it works like FOIR.
INIR. The same ratio, with the income fixed as take-home income. Heard at bank desks; not on public pages.

Always ask what your bank's ratio counts. The name alone does not tell you.

How INIR becomes a maximum loan

Multiply net monthly income by the INIR cap. That is the largest EMI allowed.
Divide that EMI by the EMI per lakh at the proposed rate and tenure. That gives the loan in lakh.

EMI per lakh means the EMI on a loan of Rs 1,00,000. At 8.5 per cent for 20 years it is about Rs 868.

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.

Example 1: a salaried borrower in Nagpur asking for Rs 30 lakh

Gross monthly salary: Rs 85,000.
Net take-home after tax, Provident Fund and professional tax: Rs 70,000.
He asks for a home loan of Rs 30 lakh at 8.5 per cent for 20 years.
The bank's policy caps INIR at 40 per cent of net income for his band.

Step 1. EMI on Rs 30 lakh at 8.5 per cent for 20 years: Rs 26,035.

Step 2. INIR = Rs 26,035 / Rs 70,000 x 100 = 37.2 per cent. Under the 40 per cent cap. He passes.

For comparison, the same EMI over gross salary gives 30.6 per cent. That is why the income base matters.

Step 3. The largest loan under this cap: Rs 70,000 x 40 per cent = Rs 28,000 as the largest EMI. Rs 28,000 / 867.82 x Rs 1,00,000 = about Rs 32.26 lakh.

INIR cap	Largest EMI	Largest loan
40 per cent	Rs 28,000	about Rs 32.26 lakh
45 per cent	Rs 31,500	about Rs 36.30 lakh
50 per cent	Rs 35,000	about Rs 40.33 lakh

Example 2: the same borrower, who also pays a car loan EMI of Rs 9,000

INIR does not change. It looks only at the new EMI: still 37.2 per cent.

But his total EMIs would be Rs 26,035 + Rs 9,000 = Rs 35,035.

FOIR on gross: Rs 35,035 / Rs 85,000 = 41.2 per cent.
FOIR on net: Rs 35,035 / Rs 70,000 = 50.0 per cent.

If the bank's FOIR cap on net income is 50 per cent, he is exactly at the cap. INIR alone would have hidden this. Run both ratios.

What the rule says

NO RBI NUMBER. The Reserve Bank of India does not fix INIR, IIR or any instalment-to-income ratio for these loans. Each bank sets it 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 INIR, IIR, instalment to income ratio and instalment to net income ratio found nothing.

One RBI cap is close but different. Paragraph 5.1 of the Microfinance Loans Directions, 2022 caps a low-income household's total monthly repayments. The cap is 50 per cent of monthly household income. It counts every loan, so it works like FOIR, not INIR. See the FOIR page.

BANK PRACTICE. The range seen on public pages on 7 September 2026:

GKToday: 30 to 40 per cent for low and middle incomes; 40 to 50 per cent for stable salaried jobs.
IndiaStudyChannel: about 40 per cent of income to the home loan instalment.
Tata Capital: a usual EMI to NMI range of 30 to 40 per cent.
State Bank of India: EMI/NMI from 20 to 70 per cent across income slabs.
State Bank of India's loan against property page shows 50, 55 and 60 per cent by net annual income.

None of these pages uses the word INIR. Your bank's policy decides the name, the income and the cap.

BANKPULSE VIEW. Treat INIR as a quick test of the salary. Never sanction on INIR alone. Run FOIR on the same file, because it catches the other loans.

Common mistakes

Using gross income. The N in INIR means net. Gross income makes the ratio look better than it is.
Forgetting other loans. INIR ignores them by design. FOIR must follow, or the borrower gets too many EMIs.
Trusting the name. One bank's EMI/NMI counts all EMIs; another's counts one. Read your policy, not the label.
Wrong deductions. Take out tax and Provident Fund. Do not take out voluntary savings unless your policy says so.
Wrong tenure. A longer tenure gives a smaller EMI and a lower INIR. Use the tenure you will actually sanction.

How to use it at your desk

Open your bank's credit policy. Find the exact name it uses and what it counts.
Take net income from the salary slips your policy asks for, usually three months, and the bank statement.
Remove only the deductions your policy names: usually tax, Provident Fund and professional tax.
Compute the proposed EMI at the rate and tenure you will offer.
Divide the EMI by net income. Compare with the cap for that income band.
Then run FOIR with every other EMI and card due. The loan must pass both.
Write both ratios in the appraisal note, the written note that supports the sanction.

Related terms

What is FOIR? (Fixed Obligation to Income Ratio) — FOIR counts every fixed payment; INIR counts only the new instalment.
FOIR vs INIR — One borrower, computed both ways, passing one ratio and failing the other.
What is LTV? (Loan to Value Ratio) — LTV caps the loan against the property; INIR against take-home income.
What is own contribution? (Margin money) — The buyer's own share of the price; INIR tests the EMI on the rest.
Housing loan rules — the BankPulse rule page for housing loans.
Housing Finance Companies Directions 2025 — the RBI direction for housing finance companies, on BankPulse.