A bank decides your loan with 5 checks, and the lowest limit wins. Example: income supports ₹1.6 crore and the property supports ₹1.8 crore, so the offer is ₹1.6 crore. JR Loan Advisors in Chennai checks all 5 before you apply.
What are the 5 checks?
- Credit record. Did you pay old loans and cards on time? The bank reads your credit report.
- Income (FOIR). FOIR means the share of your monthly income that can go to all EMIs. If the bank allows 55% and you earn ₹3 lakh a month, all your EMIs together can be up to ₹1.65 lakh.
- Cash cover (DSCR). For business loans, the bank checks if yearly cash covers yearly loan payments. DSCR = (profit after tax + depreciation + interest) ÷ (interest + principal). Try the DSCR calculator.
- Property value (LTV). LTV means loan ÷ property value. If the bank lends 60% on a ₹3 crore property, the cap is ₹1.8 crore.
- Papers. ITR, bank statements, GST returns, and a clean property title.
Worked example
| Check | Limit |
|---|---|
| Income: ₹3.04 lakh a month × 55% − old EMIs, at 9.5% for 15 years | ₹1.61 crore |
| Property: ₹3 crore × 60% | ₹1.80 crore |
| Offer (lower of the two) | ₹1.61 crore |
You can run your own numbers in the LAP eligibility from ITR tool.
What can you fix before you apply?
- Clear any overdue card or loan payment and wait for the report to update.
- Close small loans you no longer need, to free up FOIR.
- Keep business money in one main account so bank statements show the true flow.
- Get the property title and tax receipts in order.
Where are the official rules?
Before you sign, the bank must give you a Key Facts Statement with the rate, EMI and all charges (RBI Key Facts Statement rule). For home loans, RBI caps LTV at 75% to 90% based on the loan size (RBI housing finance master circular).
Want us to check your 5 limits first? WhatsApp +91 94450 93336. This is not a loan approval.
Written and reviewed by CA Jitendraa Rathi, Chartered Accountant (CA membership number 217936) · Ex-banker, 20 years of experience in credit and lending · LinkedInLast reviewed · Expert review: CA Jitendraa Rathi (ICAI 217936)