Whats is FOIR? what is Multiplier?

Question

Accepted Answer

FOIR stands for Fixed Obligation to Income Ratio. Multiplier is a factor used to determine loan eligibility.

FOIR is a measure used by lenders to assess a borrower's ability to repay a loan.
It is calculated by dividing the borrower's fixed obligations (such as loan EMIs) by their monthly income.
A lower FOIR indicates a lower risk for the lender.
For example, if a borrower has fixed obligations of $10,000 per month and a monthly income of $50,000, the FOIR would be 0.2 or 20%.
Multiplier is a factor used by lenders to determine the loan amount a borrower is eligible for.
It is calculated by multiplying the borrower's monthly income by the multiplier.
For instance, if the multiplier is 5 and the borrower's monthly income is $10,000, they may be eligible for a loan amount of $50,000.

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