JR Loan Advisors, Chennai: banks do not lend on turnover. They take 2 years of tax return profit, add back some costs, take off others, and get one yearly income. Then they check two limits: the EMI that income can carry, and the property value.
How does the calculator work?
- Income for each year = profit before tax + depreciation + interest on loans you keep paying + half of other income − payments to family members − tax paid.
- Average the two years and divide by 12 to get monthly income.
- Most EMI you can carry = monthly income × FOIR − EMIs you already pay.
- Income limit = the loan that EMI can repay at your rate and years.
- Property limit = property value × LTV.
- Your loan = the lower of the two.
Worked example
Latest year: profit ₹40 L + depreciation ₹6 L + interest ₹4 L + half of ₹2 L other income − tax ₹12 L = ₹39 L. Year before: ₹34 + 5 + 4 + 1 − 10 = ₹34 L. Average ₹36.5 L a year, or ₹3,04,167 a month. At 70% FOIR less ₹50,000 of EMIs, you can carry ₹1,62,917 a month. At 9% for 15 years that repays about ₹1.61 crore. A ₹3 crore property at 60% allows ₹1.80 crore. So income decides: about ₹1.61 crore.
How do you raise the limit?
- Income decides: close small loans, add a family member who earns as co-borrower, or ask for more years.
- Property decides: add a second property, or try a bank that lends a higher share for your property type.
Want us to read your real ITR numbers? WhatsApp +91 94450 93336. This is not a loan approval.
Sources: a bank's own LAP rules, for example SBI loan against property; the loan cost sheet every lender must give you, see RBI Key Facts Statement rule. Checked 1 Nov 2026. Half of other income is our careful middle figure, not a bank rule.
Formula reviewed by CA Jitendraa Rathi (ICAI 217936). Rough estimate, not a loan approval. Sources.
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)
Frequently asked questions
Which tax return numbers do I need?
From the last two years: profit before tax, depreciation, interest on business loans, other income (like rent or bank interest), payments to family members, and tax paid. Your CA can read these from the ITR and audited accounts.
Why add back depreciation and loan interest?
Depreciation is not cash going out. Interest on loans is added back because the bank already counts those loans as monthly EMIs. Adding it back stops the same cost being cut twice.
Why only half of other income?
Rent, bank interest and one-off gains can stop. Many banks count only part of such income. We use half as a careful middle figure. Your bank may use more or less.
Why take off payments to family members?
Salary, rent or interest paid to relatives is often added back by owners. Many banks remove it, because it can be moved around to show more profit.
Is the answer a loan offer?
No. It is a rough estimate. Each bank has its own income rules, FOIR, LTV and rate. The bank letter decides.