Manage Your Finances: How Debt-to-Income Ratio Saves Your Budget and Reduces EMI Burden
Your Money
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Moneycontrol•30-01-2026, 17:00
Manage Your Finances: How Debt-to-Income Ratio Saves Your Budget and Reduces EMI Burden
- •Debt-to-Income Ratio (DTI) measures your total debt payments against your monthly income, indicating your capacity for new EMIs.
- •A DTI below 30-40% is considered safe, while above 50% signals a high debt burden and potential financial risk.
- •Banks use DTI to assess loan eligibility; a lower DTI increases chances of loan approval and potentially lower interest rates.
- •To reduce EMI burden, limit new debts, consider prepayments, increase income, and control expenses.
- •Regularly checking your DTI helps prevent financial crises and secures your future by ensuring a healthy balance between income and debt.
Why It Matters: Understanding and managing your Debt-to-Income Ratio is crucial for financial stability and reducing EMI stress.
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