Debt-to-Income Ratio
Full form: DTI Ratio
Loans & CreditDTI ratio is the percentage of gross monthly income going to all debt obligations. Indian banks use this as FOIR. Above 50% signals financial stress and will typically result in loan rejection.
In detail
Healthy DTI: below 36% (excellent), 36-43% (manageable), 43-50% (high), above 50% (dangerous). Includes: all loan EMIs and credit card minimum dues. Does not include rent.
Formula
DTI = (Total monthly debt payments / Gross monthly income) x 100
Real-life example
🇮🇳 India example
Sunita earns Rs 90K/month. Home loan EMI Rs 28K + car EMI Rs 12K + personal loan Rs 8K + CC minimum Rs 2K = Rs 50K. DTI = 55.6% -- dangerously high.
Frequently asked questions
Does DTI include rent? ▼
No. Rent is a living expense, not debt. DTI only includes loan EMIs and minimum credit card dues.