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.