Debt27 September 2026 · 7 min read

What share of your salary should go to EMIs?

Keep total EMIs under 30% of take-home — what happens to your score above it, which loan to clear first, and why getting under 30% before a home loan is not a delay.

Every lender you will ever deal with is quietly running the same calculation on you, and almost none of them will tell you the number. Add up your monthly EMIs, divide by your monthly take-home. That single fraction decides whether your next loan is approved, what rate you are offered, and — more importantly than either — how much of a bad month your household can absorb before it has to borrow again.

The ceiling is 30%

Mr. Fino gives the debt pillar its full 20 points while total EMIs stay at or below 30% of take-home income. Above that the points come off at a little over one for every extra percentage point, and the pillar is empty at roughly 48% — the point at which nearly half of everything you earn is promised before the month begins.

30%

Of take-home, in total EMIs

Not the bank's limit — banks will lend you well past this. It is the line beyond which the rest of a financial plan stops being able to move.

EMIs as % of income	Debt pillar	What it means
20% or less	20 / 20	Comfortable. Room for a home loan later
30%	20 / 20	At the ceiling. Nothing more without a plan
35%	about 14 / 20	Stretched. A bad month means borrowing
40%	9 / 20	Where lenders start to hesitate
48% or more	0 / 20	Nearly half of income is spoken for

Why three different numbers appear in your report

You will see 20%, 30% and 35% in different places, and they are not competing. 20% is where the report shows the row in green — comfortable, with room to take on a home loan later. 30% is the pillar's ceiling and the third rung of the clearance ladder. 35% is where the row turns red rather than amber. One number describes comfort, one describes scoring, one describes alarm.

What goes into the fraction

Everything that leaves on a fixed date because you borrowed money: the home loan, the car loan, the personal loan, the two-wheeler, the consumer-durable EMI on the fridge, the education loan, and every credit card balance you are carrying rather than clearing. Rent does not count — it is spending, and it lands in a different pillar. Insurance premiums do not count. A SIP certainly does not count, however involuntary it feels.

One thing worth saying plainly: if you leave the EMI question blank, the debt pillar scores zero rather than full marks. Not answering is not the same as having nothing to declare, and an engine that assumed otherwise would hand twenty free points to every untouched profile.

Not all of it is the same debt

The pillar measures pressure, not virtue, so it counts every EMI identically. Your repayment order should not.

Credit card revolve — 36% to 48% a year. This is the most expensive money in Indian retail finance and it compounds monthly. Nothing else on this list should be prepaid before it, and almost no investment can outrun it.
Personal loan — 11% to 24%. Unsecured, usually short, and the second thing to clear. A balance transfer to a lower rate is worth the paperwork when the remaining tenure is long.
Car and consumer-durable loans — 9% to 15%. Against an asset that is losing value the whole time you are paying for it.
Home loan — 8% to 9%. The cheapest long money most households will ever be offered, secured against something that is not depreciating. Prepaying this ahead of the four above it is, almost always, a mistake made for emotional reasons.

Bringing the number down

Stop the bleeding first
Clear any revolving card balance before anything else, even if it means pausing a SIP for three months. A 42% interest rate is not a debt to manage; it is a fire.
Attack the shortest, highest-rate loan next
Closing one loan entirely removes its whole EMI from the fraction. Paying a little extra into four loans removes almost nothing from it.
Refinance the long ones rather than prepaying them
On a home loan, a rate reduction of even half a percentage point over fifteen years is usually worth more than a lump-sum prepayment you had to empty the cushion to make.
Do not fix debt with the emergency fund
The one exception is a card revolve. Otherwise, a household that clears a loan by emptying its cushion has swapped a known cost for an unknown one, and the next unexpected bill goes straight back onto the card.

The home-loan question

The most common version of this problem is someone at 38% who wants to know whether they can take on a home loan. The honest answer is that the bank will probably say yes and the arithmetic says no: at 38% there is very little left to build a cushion with, and a household with a large EMI and no cushion is the exact profile that ends up refinancing at a worse rate three years later.

Getting under 30% first is not a delay. It is the thing that makes the home loan survivable, and it usually improves the rate you are offered as well. The six-month cushion is what turns a job loss during a twenty-year loan into an inconvenience rather than a default.

How this sits against the rest of the score

Debt is the second-heaviest pillar at 20 points, and it is third on the clearance ladder — behind term and health cover, ahead of everything else. That order is deliberate. Cover is cheap and cannot be bought after the event; debt pressure is the thing that blocks every remaining move. Savings, the cushion and investments all sit behind it, because until the EMIs come down there is nothing to fund them with. The full scoring method sets out all five pillars.

Your EMI ratio is one of the seven questions, so the number takes about two minutes to get. The report shows it as a rupee ceiling — what your total EMIs would have to fall to — rather than as a percentage to do arithmetic on.