Calculator inputs
Use the fields below to estimate the highest monthly instalment you can add, without overstretching your budget.
Example data table
These examples illustrate how different incomes, expenses, and policies can change your maximum instalment and the loan it may support.
| Net income | Existing EMIs | Expenses | DTI cap | Tenure | Rate | Estimated max EMI | Estimated loan |
|---|---|---|---|---|---|---|---|
| 250,000 | 35,000 | 150,000 | 40% | 60 | 22% | 65,000 | 2,400,000 |
| 120,000 | 20,000 | 70,000 | 35% | 36 | 18% | 22,000 | 650,000 |
| 400,000 | 0 | 220,000 | 45% | 120 | 20% | 120,000 | 6,200,000 |
Example figures are illustrative and not lender quotes.
Formula used
Maximum EMI by DTI cap
This method limits all instalments to a share of income.
Allowed instalments = Income × (DTI% ÷ 100)
Capacity by DTI = Allowed instalments − Existing commitments
Maximum EMI by surplus after expenses
This method ensures expenses are covered first.
Buffered expenses = (Essential + Discretionary) × (1 + Buffer% ÷ 100)
Capacity by surplus = Income − Buffered expenses − Existing commitments
Loan amount from EMI (optional)
If you provide rate and tenure, the calculator estimates principal supported by an EMI.
Monthly rate r = (Annual rate ÷ 100) ÷ 12
Principal P = EMI × ((1+r)n − 1) ÷ (r × (1+r)n)
If r = 0, then P = EMI × n
How to use this calculator
- Enter your net income and any steady additional income.
- Add essential and discretionary expenses as monthly totals.
- Fill in existing EMIs and other monthly debt payments.
- Set a DTI limit and expense buffer that match your comfort.
- Choose a decision rule and a safety margin for caution.
- Optionally add rate and tenure to estimate a loan size.
DTI ranges lenders often apply
Many lenders screen borrowers using a 30% to 45% debt‑to‑income band. A 35% cap often fits steady earners with predictable expenses. A 40% to 45% cap may be available when surplus is strong and credit history is clean. If monthly income is 250,000 and the cap is 40%, total allowed instalments are 100,000; with 35,000 already committed, remaining room is 65,000.
Expense buffers for real budgets
Expenses rarely stay flat. A 5% buffer covers minor bill swings, while 10% is common for households managing seasonal utilities and school costs. With variable income, a 15% to 20% buffer can prevent missed instalments in low months. The calculator applies the buffer to essential plus discretionary totals, so 150,000 becomes 165,000 at a 10% buffer.
Safety margins and stress checks
A safety margin converts a theoretical maximum into a practical target. Many planners use 3% to 7% for steady pay and 8% to 12% for commissions. Stress testing helps: rerun with expenses up 5% and income down 5%. If the recommended EMI still fits under your cap, the plan is resilient.
Loan size sensitivity to rate and tenure
For a fixed EMI, longer tenures raise principal but also increase total interest. An additional EMI of 50,000 over 60 months at 22% rate supports 2.0 million in principal. Extending to 84 months may lift principal by about 15% to 20%, yet total interest can rise by more than 30% depending on the rate. Processing fees of 1% to 2% reduce net cash received even when the EMI stays unchanged.
Using outputs to make decisions
Treat the “maximum” figure as an upper boundary, not a goal. Keeping post‑loan free cash flow near 15% of income helps absorb emergencies. If DTI exceeds your chosen cap, reduce the target EMI, shorten tenure, or pay down existing commitments first. Add monthly add‑ons like insurance because a 3,000 add‑on reduces capacity by the same amount.
FAQs
1) What does maximum EMI mean in this calculator?
It is the estimated additional monthly instalment you can add on top of current obligations, based on your income, buffered expenses, and chosen rule. The recommended EMI applies your safety margin for extra caution.
2) Which decision rule should I use?
Use “Lower of both methods” for a safer estimate. Choose “DTI cap only” if your lender focuses mainly on ratios, or “Surplus after expenses” if you prefer a cash‑flow first approach.
3) Why should I add an expense buffer?
A buffer accounts for inflation, seasonal bills, and unexpected costs. Even a 5% to 10% cushion can prevent your plan from breaking when utilities, fuel, or groceries rise for a few months.
4) How is the loan amount estimated from EMI?
The calculator uses the standard present‑value formula for instalment loans, converting the annual rate to a monthly rate and discounting payments over the tenure. It is an estimate; lender pricing and insurance can change results.
5) Do processing fees change my EMI?
Fees usually reduce the net amount you receive, not the EMI itself. If a fee is deducted upfront, your EMI may stay the same, but the effective cost per borrowed unit increases.
6) How can I increase my maximum EMI capacity?
Reduce existing debt payments, cut discretionary expenses, increase stable income, or pick a shorter tenure to lower total risk. Also review add‑ons and buffers; lowering them increases capacity but reduces financial safety.