New Delhi, Nov. 25 -- Debt-to-income ratio, i.e., DTI, has emerged as one of the most important metrics that borrowers in the country rely on while conducting a background check on personal loan applicants and their applications.

Banking institutions and NBFCs are mandated to closely monitor bad loans. This makes borrowing for weak-credit-holding individuals difficult. That is why, to make the process of personal loan and credit card approval smooth, one should not only have a respectable credit score but also a low debt-to-income ratio.

The DTI ratio measures how much of a borrower's monthly income goes towards existing debt repayments. Most lenders in the country prefer a DTI of 30-40%, though some may allow up to 50% for high-income ...