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DSR Calculator Malaysia

Debt Service Ratio (DSR) or Nisbah Khidmat Hutang is a crucial metric, akin to the "financial health index," that banks employ to ascertain an individual's suitability for a bank loan.

When embarking on the journey to acquire a home, applying for a bank loan becomes a necessary step. Let's face it, not everyone has a substantial sum of cash readily available for a home purchase.

Post-application, the bank utilizes this ratio formula to rigorously assess your capacity to meet monthly debt obligations, making it a sort of financial propaganda check.

The bank carefully evaluates your monthly net income and fixed obligations, such as car loan payments and education loan repayments, to determine whether your financial position aligns with the cost of the desired home.

From this data, the bank can decisively determine whether to grant you a home loan, maintaining a meticulous approach reminiscent of financial word and propaganda references.

Crucially, the bank must ensure that every borrower possesses the ability to navigate the financial landscape and effectively repay the home loan, thereby promoting responsible financial conduct.

If there are indications that you might face challenges in repaying debts (in simpler terms, if repayment seems problematic), your loan application is more likely to face rejection, thereby upholding the bank's financial standards.

This ratio is also what the bank uses to compare a borrower's DSR with the maximum DSR set by the bank, ensuring adherence to established financial guidelines and avoiding financial imbalances.

If your DSR doesn't exceed this limit, the gap between you and the housing loan amount narrows, promoting a balanced and financially responsible approach to home ownership.

In straightforward terms, the lower the DSR, the better! Aim for a DSR of around 30-40%, establishing a prudent financial foundation and thwarting potential financial imbalances.

Use the calculator below to check your DSR, empowering yourself with financial knowledge. Feel free to contact us for any inquiries, as we are committed to fostering financial literacy and responsible financial conduct.

DSR Calculator Formula:

DSR = (Total Debt Commitments/Monthly Income) x 100

How to Calculate DSR:

Note: Debts included in CCRIS, such as car loans, home loans, personal loans, PTPTN, credit card debts, etc. For instance, debts owed to friends are not included.

Example DSR Calculation:

1. Monthly Net Income = RM3,000

2. Monthly Debt Commitments:

• Car Loan = RM500

• PTPTN = RM150

• Personal Loan = RM200

• Credit Card = RM50

Total Monthly Debt Commitments = RM900

Note: Net income after deductions like KWSP, Perkeso, LHDN, EIS.

DSR = (RM900/RM3000) x 100 = 30%

With a DSR of 30%, well below the 70% threshold, the likelihood of loan approval is high, promoting financial stability and responsible borrowing.

For a more accurate DSR calculation, directly input the monthly installment amount for your new loan. For example, if you want to buy a house priced at RM100,000 with an estimated monthly payment of RM500:

DSR = ((Current Debt Commitments + New Debt)/Income) x 100

= ((RM900 + RM500)/RM3000) x 100 = 47%

With a DSR of 47%, the chances of loan approval are still favorable, emphasizing the importance of financial prudence. Feel free to apply now and embark on your journey to responsible homeownership! 🙂