When applying for a new loan, lenders evaluate your gross monthly income minus existing EMIs, which include home, car, and personal loans. According to Adhil Shetty, CEO of Bankbazaar, lenders prefer a Fixed Obligation to Income Ratio (FOIR) below 50% to ensure borrowers can manage new debts without defaulting. If your total EMIs exceed 50-60% of your income, most banks may automatically reject your application. The type of loan also influences lending decisions; for instance, a home loan EMI has a lesser impact than a personal loan EMI due to its secured nature. Additionally, reducing existing EMIs can enhance your loan eligibility, with even small reductions potentially increasing borrowing capacity significantly. However, borrowers should be mindful of credit bureau update timelines and possible foreclosure charges when considering prepayments. While a strong credit score is beneficial, it does not outweigh the importance of managing existing EMI burdens, which ultimately dictate how much more debt you can take on.