Determine your eligibility for new financing by calculating your DSR percentage.
Car loans, personal loans, credit cards, etc.
Expected payment of the loan you're applying for.
Your Debt Service Ratio Is:
0%
Understanding Your Debt Service Ratio (DSR)
The Debt Service Ratio (DSR) is a critical formula used by banks and financial institutions to determine your creditworthiness. It calculates the proportion of your net income that is allocated to paying off debt obligations. By understanding your DSR, you can gauge the likelihood of your loan application being approved before you even step into a bank.
How is DSR Calculated?
The calculation follows a simple mathematical logic:
DSR = (Total Monthly Commitments / Net Monthly Income) x 100
DSR Benchmarks and Approval Probability
Below 40%: Excellent. You have high disposable income and are considered a low-risk borrower.
40% – 60%: Good. Most banks will approve loans in this range, provided your credit history is clean.
60% – 70%: Moderate. You are approaching the maximum threshold for many commercial banks.
Above 70%: High Risk. Most lenders will reject applications at this level as you may struggle with living expenses.
Practical Example
If your Net Monthly Income is 5,000 units and your Total Monthly Commitments (including existing car loans and the new mortgage you are applying for) total 2,000 units, your DSR would be:
(2,000 / 5,000) x 100 = 40%
In this scenario, a 40% DSR indicates a healthy financial position for most lending criteria.
function calculateDSR() {
var netIncome = parseFloat(document.getElementById('dsr_net_income').value);
var existingDebt = parseFloat(document.getElementById('dsr_existing_commitments').value) || 0;
var newDebt = parseFloat(document.getElementById('dsr_new_commitment').value) || 0;
var resultBox = document.getElementById('dsr_result_box');
var dsrValueDisp = document.getElementById('dsr_value');
var dsrStatusDisp = document.getElementById('dsr_status');
var dsrExplDisp = document.getElementById('dsr_explanation');
if (!netIncome || netIncome <= 0) {
alert('Please enter a valid Net Monthly Income.');
return;
}
var totalCommitments = existingDebt + newDebt;
var dsr = (totalCommitments / netIncome) * 100;
var dsrFixed = dsr.toFixed(2);
resultBox.style.display = 'block';
dsrValueDisp.innerText = dsrFixed + '%';
if (dsr <= 40) {
resultBox.style.backgroundColor = '#e8f5e9';
dsrStatusDisp.innerText = 'STATUS: EXCELLENT';
dsrStatusDisp.style.color = '#2e7d32';
dsrExplDisp.innerText = 'Your debt levels are healthy. You have a very high chance of loan approval based on income capacity.';
} else if (dsr <= 60) {
resultBox.style.backgroundColor = '#fff3e0';
dsrStatusDisp.innerText = 'STATUS: GOOD / MODERATE';
dsrStatusDisp.style.color = '#ef6c00';
dsrExplDisp.innerText = 'Your DSR is within acceptable limits for most financial institutions. Approval is likely.';
} else if (dsr <= 70) {
resultBox.style.backgroundColor = '#fff9c4';
dsrStatusDisp.innerText = 'STATUS: BORDERLINE';
dsrStatusDisp.style.color = '#f9a825';
dsrExplDisp.innerText = 'You are nearing the maximum debt capacity. Lenders may look more closely at your employment stability.';
} else {
resultBox.style.backgroundColor = '#ffebee';
dsrStatusDisp.innerText = 'STATUS: HIGH RISK';
dsrStatusDisp.style.color = '#c62828';
dsrExplDisp.innerText = 'Your debt ratio is very high. You may face difficulties in securing new financing without reducing existing debt.';
}
}