Manage Your EMIs: Understand Debt-to-Income Ratio for Financial Stability
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Moneycontrol•31-01-2026, 23:07
Manage Your EMIs: Understand Debt-to-Income Ratio for Financial Stability
- •A high Debt-to-Income (DTI) Ratio indicates that a significant portion of your monthly income is consumed by EMIs, leading to financial stress.
- •DTI is calculated as (Total Monthly EMIs ÷ Monthly Income) × 100, providing a clear picture of your debt burden.
- •Financial experts recommend keeping your DTI below 40%; exceeding this limit is a warning sign for your financial health.
- •Regularly monitoring your DTI helps in effective budget planning and prevents over-indebtedness.
- •Before taking new loans, assess your DTI to ensure financial balance and avoid future stress.
Why It Matters: The Debt-to-Income Ratio is crucial for assessing financial health and managing EMI burdens effectively.
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