D
General
Debt-to-Income Ratio
Basically the percentage of your income that goes toward debt repayments. If you earn R25,000 and pay R10,000 monthly toward debts, your ratio is 40%. Most lenders say 40-50% is the max before you're considered over-indebted — any higher and you're in trouble.
Usage Examples
"Bongani earned R30,000 gross, with R9,000 going to existing debts (loan, car, store cards). His ratio was 30%. When he applied for another R50,000 loan, the repayment was R1,400 monthly — that would push his ratio to 35%. Still manageable, so approved."
"Thandi had a rough month: R18,000 net income but R12,000 in debt payments (Nedbank R3,500, Capitec R2,800, car finance R2,200, utilities and rent R3,500). Her ratio was 67%. Banks won't touch her until debts come down."
"Sipho earned R32,000 monthly and carried R8,000 in debt repayments — a 25% ratio. Lekker. When he got a bonus, he thought about buying a car, but the R2,000 monthly payment would push him to 31%, still under 40%. He knew his limits."