Estimate your debt service ratio by comparing monthly debt commitments with monthly income.
DSR stands for debt service ratio. It compares your total monthly debt commitments with your monthly income. Lenders may use DSR as one part of affordability assessment.
A lower DSR may suggest more room for repayment, while a higher DSR may suggest heavier debt burden. Actual bank assessment may use different income rules and commitment calculations.
Before applying for a new car loan, home loan or personal loan, estimate your DSR to understand how the new repayment may affect your monthly cash flow.
No. It is an estimate only. Every bank may use different DSR limits and underwriting rules.
Examples may include car loan, home loan, personal loan, credit card repayment and other fixed monthly commitments.
You may lower DSR by reducing existing debt, increasing income, choosing a lower loan amount or extending tenure carefully.