Key Financial Ratios & Guidelines 1. Total Loan / Annual Salary Purpose: Measures how much future income is already committed to debt.Recommendation: Keep total borrowing below 4× your annual income. 2. EMI / Monthly Income Purpose: Indicates how much of your monthly earnings go toward loan repayments.Recommendation: Keep this ratio under 25% to maintain financial flexibility. 3. Total Assets / Total Liability Purpose: Assesses overall financial health and net worth.Recommendation: Aim for assets to be more than twice your liabilities. Interest & Repayment Strategy Interest RatesCompare your loan’s interest rate with market alternatives. High rates may signal poor loan choices. Repayment PeriodsInsight: Longer tenures increase total repayment cost. Recommended Limits: Personal Loans: < 2 yearsAuto Loans: < 5 yearsHome Loans: < 20 years Annual Interest Payments / Annual Income Purpose: Shows how much income is consumed by interest alone.Recommendation: Keep this ratio below 10%. Smart debt management isn’t just about repayment—it’s about protecting your income, assets, and peace of mind. Borrow wisely, and always measure before you commit.