What is FOIR?

FOIR (Fixed Obligations to Income Ratio) takes into account all the fixed obligations that a borrower is supposed to meet regularly on a monthly basis. The fixed obligations do not include statutory deductions from the salary such as Provident Fund, professional tax and deductions for investments such as insurance or a recurring deposit.

As per bank's eligibility criteria, the borrowers should restrict all their fixed obligations including the currently applying loan EMI to 50% of his monthly income. Or in other words, considering that 50% of your income is required for your living, banks would see that all your monthly loan obligations / liabilities should be only 50% of your monthly income.