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FOIR: meaning, full form and formula

Short answerFOIR is the fixed obligation to income ratio: the share of monthly income already committed to EMIs and other fixed payments.

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  1. Example, made-up numbers
  2. Where definitions differ

FOIR stands for fixed obligation to income ratio. It shows how much of a borrower’s monthly income is already spoken for.

FOIR = (existing fixed obligations + proposed EMI) / net monthly income

Example, made-up numbers

Item₹ per month
Net monthly income80,000
Existing EMIs12,000
Proposed EMI20,000
FOIR40%

Where definitions differ

  • Income: gross or net, and whether incentives and rent count.
  • Obligations: whether card minimum dues and rent paid count, and how EMIs that are ending soon get treated.
  • EMI: the proposed loan’s EMI may or may not be included in an “existing FOIR” figure.

So the same borrower can show different FOIRs at different lenders. When you compare two figures, check the definitions first.

Each lender sets its own FOIR limits, which vary by product and income band.