Debt-to-Income Ratio in Singapore: Your Questions Answered
These are the questions people ask most often about debt-to-income ratio. Each answer is short; follow the links for the full detail.
What does a debt-to-income ratio calculation tell me?
Shows what share of income goes to debt.
What is the formula?
DTI = monthly debts ÷ monthly income × 100.
What do I need to enter?
Monthly debt payments (S$), Gross monthly income (S$).
Is this financial advice?
No. It is a calculation tool. For decisions about loans or investments, compare official offer documents and consider speaking to a licensed adviser.
Can you show an example?
For example, with these inputs:
- Monthly debt payments (S$): 2,200
- Gross monthly income (S$): 7,000
the calculator returns:
- Debt-to-income ratio: 31.43%
Any tips?
- Car loans are capped at seven years, and interest is charged on the original amount for the whole term.
- Check for early repayment penalties and processing fees before taking any loan.
- Factor in inflation when you plan for goals that are many years away.
Background
Inflation erodes buying power, so a savings goal set in today's dollars needs to be adjusted upwards for the years it will take to reach it. Singapore's core inflation has varied widely over the past decade, so it is worth testing a range of rates.
Compounding is the reason long-term saving works: returns earn further returns, so the growth curve steepens over time. The same maths works against you with debt, which is why credit card balances at around 27% a year grow quickly if only minimum payments are made.
Cars in Singapore carry costs found almost nowhere else, including the Certificate of Entitlement and the Additional Registration Fee. Loans are capped at 60% or 70% of the price depending on the car's Open Market Value, and the maximum tenure is seven years.
Related calculations
- Inflation Calculator: Shows how inflation changes prices and purchasing power.
- Fixed Deposit Calculator: Calculates interest on a Singapore fixed deposit, which typically pays simple interest at maturity.
- Dividend Yield Calculator: Calculates dividend yield for SGX stocks and REITs.
- Break-Even Calculator: Finds how many units you must sell to cover costs.
Try it yourself with the Debt-to-Income Ratio Calculator.
Run your own numbers: Debt-to-Income Ratio Calculator