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Formula used
- Total existing EMIs (monthly) = sum of all listed EMI amounts.
- Existing EMI ratio (%) = (Total existing EMIs ÷ Net monthly income) × 100.
- Total outflow with proposed = Existing EMIs + Other obligations + Proposed new EMI.
- Total ratio with proposed (%) = (Total outflow with proposed ÷ Net monthly income) × 100.
- Remaining total = sum of (EMI × remaining months) for each row.
How to use this calculator
- Enter your net monthly income, after taxes.
- Add every existing EMI and its remaining months.
- Include other fixed monthly obligations, if any.
- Optionally add a proposed new EMI to test impact.
- Press Calculate and review ratios and risk bands.
Example data table
| Net income | EMIs (monthly) | Other obligations | Proposed new EMI | Existing ratio | Total ratio | Band |
|---|---|---|---|---|---|---|
| 250,000 | 18,000 + 22,000 + 9,500 | 45,000 | 30,000 | 19.80% | 49.80% | Low → High (with proposed) |
| 150,000 | 35,000 + 20,000 | 30,000 | 0 | 36.67% | 56.67% | High → Severe (with obligations) |
Why EMI burden matters
Monthly EMIs are fixed cash commitments that reduce flexibility. A household earning 250,000 may feel comfortable, yet three EMIs totaling 49,500 can quietly absorb 19.8% of income. Adding rent, utilities, and support payments pushes the real load higher. Tracking burden early helps prevent missed payments, late fees, and stress-driven borrowing. When fixed outflow exceeds 45%, even short income shocks can trigger arrears.
Key ratios lenders review
This calculator highlights two ratios: existing EMI ratio and total outflow ratio. Existing ratio = existing EMIs ÷ net income. Total ratio adds other fixed obligations and a proposed new EMI. Many borrowers aim to keep total ratio below 40%, while some tolerate up to 50% when income is stable and emergency savings are strong. For variable income, test both an average month and a conservative low month.
Interpreting the burden bands
Use the bands as a planning signal. Under 20% is low, 20–35% is moderate, 35–50% is high, and 50% or more is severe. For example, net income 150,000 with EMIs 55,000 already sits at 36.7% high. If obligations add 30,000, total ratio becomes 56.7% severe.
Using remaining months for planning
Remaining months estimate how long the pressure lasts. Remaining total = EMI × remaining months. A 22,000 EMI with 24 months remaining equals 528,000 outstanding in scheduled payments. Summing remaining totals across loans helps compare strategies: refinancing, prepayment, or keeping cash for emergencies. It also clarifies when a future “free-up” month may arrive. If one EMI ends soon, redirect that amount into a faster payoff plan.
Actions to lower monthly pressure
Start with small wins: consolidate high-rate debt, extend tenure only when it lowers monthly risk, and avoid stacking new EMIs during peak obligations. Build a buffer equal to at least 10% of monthly income, then direct extra cash to the costliest EMI. Recheck ratios after every major change, and keep room for savings and insurance premiums.
FAQs
What should I include as an EMI?
Include any fixed monthly repayment such as personal loans, auto loans, education loans, and installment plans. If a payment varies, enter a conservative average. Exclude one‑time bills; add them under other fixed obligations only if they repeat monthly.
Should I use net income or gross income?
Use net monthly income, meaning take‑home pay after taxes and standard payroll deductions. Net income reflects real cash available for EMIs and essential costs, so it provides a safer affordability view than gross income.
How do I handle credit card payments?
If you pay a fixed installment plan, enter it as an EMI with expected remaining months. If payments vary, use the minimum payment plus a realistic extra amount, then estimate months based on your payoff plan.
What does room under 40% target mean?
It estimates the maximum new EMI you could add while keeping total fixed outflow near 40% of net income, after existing EMIs and other obligations. It is a planning guide, not an approval guarantee.
Why do I see two burden bands?
The first band measures only your existing EMIs against income. The second band includes other obligations and a proposed new EMI to show how a new commitment could change risk and reduce monthly flexibility.
How often should I recalculate?
Recalculate after any major change: salary shifts, new debt, refinancing, rent changes, or a closed loan. A quick monthly check also helps you spot creeping obligations before they become hard to manage.