What is a good debt-to-income ratio?

Full explanation

Debt-to-income ratio (DTI) = Total monthly debt payments / Gross monthly income × 100. Lenders typically require: (1) Housing DTI (rent/EMI ÷ income): below 28–35%. (2) Total DTI (all debt payments ÷ income): below 40–43%. Below 36% is considered healthy. Above 50%: financially stressed; income growth or debt reduction urgently needed. The DTI determines whether you can take on new loans. It also signals your financial health — if half your income goes to debt repayments, you have little room for savings, emergencies, or investment.