Calculate your DTI ratio and understand if your debt level is safe. Banks use this metric alongside FOIR to assess your credit health before approving any new loan.
DTI (Debt-to-Income Ratio) is the primary metric global and Indian lenders use to assess your borrowing capacity. It compares total monthly debt servicing to gross income.
| DTI Range | Risk Level | Bank View |
|---|---|---|
| Below 30% | Safe | Excellent — high chances of loan approval |
| 30%–40% | Moderate | Acceptable — may get loan with conditions |
| 40%–50% | Elevated | Risky — lenders may ask for collateral |
| Above 50% | High Risk | Loan rejection likely. Reduce debt first. |
DTI considers ALL debt obligations against gross income. FOIR (Fixed Obligation to Income Ratio) used by Indian banks is similar but may exclude certain obligations and uses net take-home in some banks. Both measure your capacity to service debt.