Difference between FOIR and DTI ratio: – Have you ever applied for a loan from a bank and the officer said, “Sir, your loan is too low. We can’t give you more.”
Then another bank said, “Your DTI ratio is high, so the loan amount has been reduced.”
Now you’re wondering—
What exactly are FOIR and DTI ratios?
And what’s the difference between them? Are they the same thing?
Basically, both ratios measure your repayment capacity,
but their angles are different.
So, let’s understand today—
👉 Difference between FOIR and DTI ratio
👉 Which ratio is more important for loan approval?
👉 And how can you control your FOIR and DTI to easily get your loan approved?
What is FOIR – Fixed Obligation to Income Ratio
FOIR stands for Fixed Obligation to Income Ratio,
that is, the portion of your monthly income that is already going towards EMIs or loans.
👉 Formula: –
FOIR = (Total Monthly Obligations ÷ Gross Monthly Income) × 100
Example: –
If your salary is ₹60,000 and you are already paying an EMI of ₹20,000—
then FOIR = (20,000 / 60,000) × 100 = 33%
This means—33% of your income is already going towards EMIs.
What does the bank understand by FOIR?
The bank looks at this ratio to determine whether you have the financial capacity to pay the new EMI.
👉 Low FOIR (under 40%) = Easy loan approval
👉 High FOIR (above 60%) = High risk, loan rejection possible
How to Calculate FOIR In Home Loan
What is the DTI Ratio – Debt to Income Ratio
DTI stands for Debt-to-Income Ratio, which is the ratio of your total debt to your total income.
👉 Formula: –
DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100
Example: –
Suppose your monthly income is ₹80,000
and you have a total EMI of ₹32,000.
Then DTI = (32,000 / 80,000) × 100 = 40%
What does the bank understand by DTI?
DTI tells you how much of your total income is going towards EMIs or debt payments.
If the DTI is under 40%, the bank considers the borrower safe.
If the DTI exceeds 50–60%, the bank reduces the loan amount or rejects it.
👉 In short:
FOIR = EMI vs Income (Monthly Focus)
DTI = Total Debt vs Income (Overall Focus)
Difference between FOIR and DTI Ratio
Are FOIR and DTI the same?
No, brother!
They are related to each other but not exactly the same.
- FOIR only looks at monthly EMI obligations.
- DTI covers total outstanding debt.
Example: –
If someone has a personal loan of ₹20 lakh and a car loan of ₹5 lakh —
FOIR will only consider their EMIs,
while DTI will compare the total liability of both loans to income.
👉 So, DTI is a broad ratio,
while FOIR is a slightly narrower but more practical ratio for loan decisions.
Why Both Ratios Matter – The Key to Loan Approval
When granting a loan, banks don’t just look at one ratio.
but rather, they combine FOIR, DTI, and CIBIL to read your financial story.
👉 FOIR tells you whether your income can afford EMIs.
👉 DTI tells you how much debt you have.
If both FOIR and DTI are balanced, loan approval is almost certain.
Which is better for a home loan – FOIR or DTI?
Most banks in India prefer FOIR, as it reflects monthly repayment capacity.
However, DTI is more common internationally, as it reflects the borrower’s total debt position.
👉 So, if you’re applying for a home loan,
it’s ideal to keep FOIR below 40% and DTI below 35%.
Conclusion
Your dream is to buy your own home for your family.
You’ve worked hard for years, saving, but the reason for loan rejection is—
“Your FOIR or DTI is high.”
A little financial understanding can save you from that pain.
Just remember—
Loan approval isn’t just based on CIBIL, but also on FOIR and DTI.
The more wisely you maintain these,
the sooner your dream of “your own home” will come true. 🏡✨
👉 You should definitely check your FOIR and DTI:
Home Loan FOIR & DTI Calculator – homeloanfoir.com
Just enter your income and EMI and see immediately whether you’re ready for loan approval or not!