When loan institutions approve personal loans, in addition to considering the borrower's credit score on the credit report, they may also refer to other indicators, such as the Debt-to-Income Ratio (DTI) / Debt Service Ratio (DSR). DTI/DSR analyzes the ratio of total debt to income by assessing monthly income and repayment amounts, categorizing the debt-to-income ratio into four rankings:
| Ranking | Debt-to-Income Ratio |
|---|---|
| Healthy | 0-19% |
| Normal | 20-39% |
| Marginal | 40-59% |
| Poor | 60-100% |
Note: The above rankings are for reference only. Different loan institutions may define rankings differently.
For lending institutions, a lower debt-to-income ratio indicates better repayment ability, which increases the likelihood of loan approval. This suggests better financial health and money management skills.
Note: All the information above is updated as of May 2018. Final data and interest rates are subject to TransUnion and the individual lending institutions.