Debt-to-Income Ratio Calculator
Check if your debt levels are healthy before applying for new loans
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Your DTI Ratio
30%
Healthy
0%36%43%100%
Monthly income₹1.00 L
Total monthly debt₹30,000
Available income₹70,000
Recommendation
Your debt-to-income ratio is healthy. You are in a strong position to take on new credit if needed. Lenders generally view a DTI below 36% favourably for home and car loans.
Understanding Debt-to-Income Ratio
The debt-to-income (DTI) ratio measures how much of your monthly income goes towards debt repayments. It is a key metric used by lenders to assess your ability to take on new debt. In India, banks refer to a similar concept as FOIR (Fixed Obligation to Income Ratio). A lower DTI indicates better financial health and stronger loan eligibility.
Frequently Asked Questions
What is a good debt-to-income ratio?▾
A DTI ratio below 36% is considered healthy by most lenders. Between 36-43% is manageable but could limit your borrowing options. Above 43% is considered risky, and most banks will hesitate to approve new loans. The lower your DTI, the better your chances of getting loans at favourable interest rates.
How does DTI ratio affect my loan eligibility?▾
Banks and NBFCs in India use your DTI ratio (often called FOIR — Fixed Obligation to Income Ratio) to decide loan eligibility. Most lenders prefer total EMI obligations to be under 50-60% of net monthly income. If your DTI is too high, you may face loan rejection, higher interest rates, or reduced loan amounts. Reducing existing debts before applying can significantly improve your eligibility.
How can I reduce my debt-to-income ratio?▾
You can reduce your DTI ratio by: (1) Paying off high-interest debts like credit cards first (debt avalanche method), (2) Consolidating multiple loans into one lower-interest loan, (3) Increasing your income through side hustles or salary negotiations, (4) Avoiding new debt, and (5) Making extra payments towards principal on existing loans. Even small reductions can meaningfully improve your loan eligibility.
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