# How does a bank decide your loan? The 5 checks, in plain words

> A bank decides a loan with 5 checks: your credit record, your income (FOIR), your cash cover for instalments (DSCR), the property value (LTV), and clean papers. JR Loan Advisors in Chennai sees the lowest of these limits decide the amount.

Source: https://jrloanadvisors.com/insights/how-a-bank-decides-your-business-loan/ · Author: CA Jitendraa Rathi (CA membership number 217936), JR Loan Advisors · Updated 1 Nov 2026

**[Discuss a ₹5 Cr+ loan](https://jrloanadvisors.com/contact/#enquiry)** · WhatsApp +91 94450 93336 (https://wa.me/919445093336) · Call +91 94450 93336 · [Enquiry form](https://jrloanadvisors.com/contact/#enquiry). Loans of ₹5 crore and above.

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?

1. **Credit record.** Did you pay old loans and cards on time? The bank reads your credit report.
2. **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.
3. **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](/tools/dscr-calculator/).
4. **Property value (LTV).** LTV means loan ÷ property value. If the bank lends 60% on a ₹3 crore property, the cap is ₹1.8 crore.
5. **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](/tools/lap-eligibility-itr-calculator/).

## 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](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12663&Mode=0)). For home loans, RBI caps LTV at 75% to 90% based on the loan size ([RBI housing finance master circular](https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=12824)).

Want us to check your 5 limits first? WhatsApp +91 94450 93336. This is not a loan approval.

## Frequently asked questions

### What is the first thing a bank checks?

Your credit record. The bank pulls your credit report to see if you paid past loans and cards on time. Late payments in the last 12 months hurt the most.

### Why did I get less than I asked for?

The bank works out several limits: one from income, one from property value, and sometimes one from DSCR. You get the lowest. Find which one is lowest and fix that one.

### Does RBI decide my loan amount?

No. RBI sets some outer rules, like the most a bank may lend against a home. Each bank sets its own income and DSCR rules inside those.

### How long does the decision take?

It depends on the bank and how complete your papers are. Missing papers are the most common cause of delay.

## Discuss a ₹5 Cr+ loan

Send your papers for a free first look (₹5 crore to ₹250 crore). This is not a loan approval. **[Discuss a ₹5 Cr+ loan](https://jrloanadvisors.com/contact/#enquiry)** · WhatsApp +91 94450 93336 (https://wa.me/919445093336) · Call +91 94450 93336 · [Enquiry form](https://jrloanadvisors.com/contact/#enquiry). Loans of ₹5 crore and above. You may pay us a fee. We tell you the amount in writing before we start.

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JR Loan Advisors — loan help for borrowers, Chennai & Tamil Nadu. Phone/WhatsApp +91 94450 93336 · jitendraa@jrloanadvisors.com · https://jrloanadvisors.com/