How much EMI can you actually afford?

Ask five people how much EMI is “safe” and you’ll get the same answer from most of them: keep it under 40% of your income. It’s not bad advice. It’s also not the whole picture, and treating it like a hard ceiling is how people end up technically fine and actually stretched.

The rule is a starting point, not a verdict.

Where the 40% comes from

Lenders use debt-to-income ratio because it’s a decent proxy for repayment risk across thousands of borrowers. At a portfolio level, it works. At the level of one specific month in one specific life, it’s missing almost everything that determines whether an EMI actually feels affordable.

Two people can both sit at exactly 35% and be in completely different positions — one has three months of expenses saved and stable income, the other has nothing set aside and a job that pays irregularly. The ratio is identical. The risk is not.

What the rule doesn’t ask

How much is already spoken for before this EMI even lands. 40% of income sounds fine until you realize 25% of it was already going to an existing loan, and this new EMI is the one that tips things from comfortable to tight.

What happens if income dips for a month. A ratio calculated against your best-case income says nothing about what happens during your worst month — a slow freelance month, a delayed reimbursement, a bonus that didn’t arrive.

Whether there’s a buffer at all. The same 35% is very different with ₹50,000 in savings behind it versus ₹0. The ratio never asks this question, but it’s usually the one that matters most when something goes wrong.

A number that accounts for your actual month

None of this means the 40% guideline is useless — it’s a reasonable ceiling to keep in mind. It just isn’t a substitute for looking at your specific income, your specific existing commitments, and your specific safety buffer together, before signing up for a new one.

Dette’s Pre-Purchase Check does that: your income, what you already owe, and this new EMI, turned into a clear before-and-after — not a generic rule, your actual number.