What DTI ratio do banks prefer?

Most banks in India prefer DTI below 40-50%. For home loans specifically, many banks use a 50% FOIR (similar concept).

Does rent count in DTI?

In India, rent typically isn't included in DTI for loan applications. However, in the US, mortgage DTI calculations may include proposed housing costs.

Can I get a loan with 60% DTI?

Very unlikely from mainstream lenders. You'd need to reduce existing debt or increase income before applying.

Debt-to-Income Ratio (DTI) Explained

Your debt-to-income ratio compares your total monthly debt payments to your gross monthly income. It's a crucial metric lenders use to assess your borrowing capacity.

How to Calculate DTI

DTI = (Total Monthly Debt Payments / Gross Monthly Income) × 100. Include: All EMIs (home, car, personal), credit card minimum payments, and any other fixed obligations. Don't include: Utilities, groceries, insurance premiums.

What Is a Good DTI?

Below 30%: Excellent — lenders love you. 30-40%: Acceptable — most loans approved. 40-50%: Concerning — limited borrowing capacity. Above 50%: Risky — loan rejections likely.

How to Improve DTI

Pay off high-interest debt first. Avoid taking new loans. Increase income (side hustles, salary negotiation). Consolidate multiple debts into one lower-EMI loan.