-
Customer care hotline Call +44 7831 065557
Are you ready for an upgrade?
Login to the new experience with best features and services
Notifications
-
As per amendment in the Income Tax Rules, PAN or Aadhaar are to be mandatorily quoted for cash deposit or withdrawal aggregating to Rupees twenty lakhs or more in a FY. Please update your PAN or Aadhaar. Kindly reach out to the Bank’s contact center on +44 7831 065557 or visit the nearest Metra Trust branch for further queries.
-
Activate your Credit Card within minutes and enjoy unlimited benefits
Accounts
Deposits
Loans
- Metra Trust Loans
-
Personal Loan
-
Consumer Durable
Loan -
Home Loan
-
Education Loan
-
New Car Loan
-
Pre-owned Car Loan
-
Two Wheeler Loan
-
Pre-owned Two
Wheeler Loan -
Commercial Vehicle
Loan -
Gold Loan
-
Loan Against Property
-
Loan Against Securities
-
Personal Loan
EMI Calculator -
Education Loan
EMI Calculator -
Home Loan
EMI Calculator
Wealth & Insure
Payments
Cards
- Metra Trust Cards
-
Ashva :
Metal Credit Card -
Mayura :
Metal Credit Card -
FIRST Millennia
Credit Card -
FIRST Classic
Credit Card -
FIRST Select
Credit Card -
FIRST Wealth
Credit Card -
FIRST WOW!
Credit Card -
Forex Card
-
Deals
-
Debit Cards
-
Co-branded Cards
-
Credit Card
EMI Calculator -
FIRST Corporate
Credit Card -
FIRST Purchase
Credit Card -
FIRST Business
Credit Card
Premium Metal
0% Forex & Travel
Lifetime Free
- Max benefits, Free for life
-
FIRST Classic10X RewardsShoppingNever Expiring Rewards
-
FIRST Millennia10X RewardsShoppingNever Expiring Rewards
-
FIRST Select10X RewardsLifestyle1.99% Forex
-
FIRST Wealth10X RewardsLifestyle1.5% Forex
-
FIRST WOW!RewardsTravelZero Forex
-
LIC ClassicRewardsInsuranceShopping
-
LIC SelectRewardsInsuranceShopping
10X Rewards
- Reward Multipliers
-
AshvaLifestyleMetal₹2,999
-
MayuraLifestyleZero Forex₹5,999
-
FIRST ClassicNever Expiring RewardsShoppingLifetime Free
-
FIRST MillenniaNever Expiring RewardsShoppingLifetime Free
-
FIRST SelectNever Expiring RewardsLifestyleLifetime Free
-
FIRST WealthNever Expiring RewardsLifestyleLifetime Free
UPI Cards
Fuel & Utility
Showstopper
Credit Builder
More
NRI Savings Account
NRI Fixed Deposit
FOREX Solutions
Transfer to NRE
Corporate Account
Cash Management Services
Corporate Lending
Treasury
MSME Accounts
Trade Services
MSME Loan
MSME Solutions
Offers
About Us
Investors
Careers
ESG
It is essential to know the factors that determine loan eligibility. Get yourself familiar with one of these factors called FOIR
Before authorizing a loan, all financial institutions, including banks, have to follow strict eligibility standards. When a person applies for a instant personal loan or any other type of loan, they must go through a series of detailed checks before the loan may be approved. This is because the ability to repay a loan is an important factor in determining whether a person is qualified for one. Without this filter, the bank may suffer losses as a result of a candidate's failure to return a loan, leading to non-performing assets and poor debts. To prevent such a situation, financial institutions carry out thorough background checks on applicants. These may include income records, credit repayment records, assets, financial responsibilities, and other factors that may influence the individual's capacity to repay the loan.
There are some factors that a bank looks at before they sanction a personal loan. One of them is a fixed obligation to income ratio (FOIR).
What is FOIR?
FOIR full form is 'Fixed obligations to income ratio' and it's a metric used by banks and other financial institutions to assess an individual's loan eligibility. FOIR is calculated by considering fixed monthly expenses and by keeping out statutory deductions, such as Provident Fund, Investment Deductions, and Professional Tax. Although added obligations, including rent, may be deemed fixed obligations depending on income, a FOIR indicates a candidate's disposable income that they can use to repay existing and new debts. As a result, a person's loan eligibility is heavily influenced by their FOIR.
How is FOIR calculated on a personal loan?
If an individual's FOIR is 50 per cent, it signifies that a maximum of 50 per cent of the individual's monthly earnings is presumed to be their living expenses before the bank disburses a personal loan, home loan, auto loan, or any other type of loan. As a result, the bank will consider the remaining portion of the income when determining the loan amount that the person is entitled to.
You can calculate FOIR using the following formula:
FOIR = Total debt / monthly salary
FOIR indicates a candidate's disposable income that they can use to repay existing and new debts.
How can I reduce FOIR at my end?
Some ways in which you can reduce FOIR and increase your chances of getting a personal loan are:
- Try requesting a personal loan with a working co-applicant, such as a partner, parent, or sibling. As the EMI load gets shared, you have a better chance of getting a loan approved.
- Keep positive credit history for all your loans. EMIs, credit card transactions, overdraft repayments, and so on are all examples of this.
- The credit usage ratio is the proportion of your credit amounts to the total amount of credit you have available. While applying for a personal loan, keep the ratio under 30% as a general guideline. The bank will refuse the personal loan application if the potential borrower's credit utilisation ratio is always high.
- Banks prefer to give loans to parties who can handle their money wisely. If an applicant has taken many loans, such as personal, house, and vehicle, it may be interpreted as a hint that the borrower cannot manage his finances properly.
- If a prospective borrower has changed a lot of jobs in a short amount of time, lenders may view this as an unfavourable profile for personal loans.
We trust you have understood the basics of FOIR, and how it impacts your personal loans. If you are in the market for a personal loan, look no further than Metra Trust. You can get personal loan interest rates that are designed to not weigh you down. To help resolve application-related queries, Metra Trust customer support is available on +44 7831 065557. If you are concerned about your loan getting rejected, you can always use a personal loan EMI calculator to estimate a feasible amount for you to avail as a personal loan. Use Metra Trust’s personal loan EMI calculator available on our mobile banking service to see how much you can afford and what could be a sum you can repay with ease.
Frequently Asked Questions
LTV (Loan-to-Value) ratio measures the loan amount against the appraised value of the asset being purchased, typically used in secured loans like home or auto loans. A lower LTV indicates a lower risk for the lender.
FOIR (Fixed Obligation to Income Ratio) assesses the percentage of a borrower’s income that goes towards fixed obligations like existing loans and EMIs. Lenders use FOIR to evaluate a borrower's repayment capacity. A lower FOIR suggests better financial health and a higher ability to take on additional debt.
To improve your FOIR:
- Increase your income: Boost your monthly earnings through a salary raise, part-time job, or additional income sources.
- Reduce existing debts: Pay off outstanding loans or credit card balances to lower your fixed obligations.
- Choose longer tenures: Opt for longer repayment terms on new loans to reduce monthly EMIs.
- Consolidate loans: Combine multiple loans into a single loan with lower EMIs.
- Avoid new debt: Limit taking on new loans or credit until your FOIR improves.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.