Your debt-to-income ratio (DTI) is a simple calculation: take your total monthly debt repayments and divide them by your gross monthly income. Multiply by 100 to get a percentage.
Example:
This number tells lenders how much of your income is already committed to debt. The lower your DTI, the better your chances of getting approved for credit — and the better the interest rates you'll be offered.
| DTI Range | Rating | What It Means |
|---|---|---|
| Below 30% | Excellent | You're in great shape. Lenders will compete for your business. |
| 30% - 40% | Good | Manageable, but there's room to improve. |
| 40% - 50% | Concerning | You're stretching your income. New credit will be harder to get. |
| Above 50% | Dangerous | You're over-indebted. Consider seeking help before it gets worse. |
According to the National Credit Regulator, the average South African consumer has a DTI of around 63%. That means most South Africans are already in the "dangerous" zone — and may not even know it.
When calculating your DTI, include ALL monthly debt obligations:
When you apply for any credit in South Africa — a home loan, vehicle finance, credit card, or even a cellphone contract — the lender is legally required under the National Credit Act (NCA) to assess your affordability. Your DTI is central to this assessment.
If your DTI is too high, the lender must decline your application. This isn't them being difficult — it's consumer protection designed to prevent you from taking on debt you can't afford.
Target your smallest debts first. Each one you eliminate frees up cash flow and reduces your DTI immediately. This is psychologically powerful — quick wins build momentum.
Every new account increases your DTI. Before opening a new store account for that 10% discount, ask yourself: is it worth making your financial position worse?
A side hustle, overtime, or freelance work directly improves your DTI by increasing the denominator in the calculation.
If you're paying 20%+ interest on multiple accounts, a consolidation loan at a lower rate can reduce your total monthly payments. But only if you close the old accounts afterwards.
Many creditors will accept reduced payment arrangements if you're proactive about communicating. A reduced monthly payment lowers your DTI.
Use our free Debt-to-Income Calculator to find out exactly where you stand. It takes less than two minutes and could be the most important financial exercise you do this year.
DebtBridge provides free financial education for South Africans. This article is for informational purposes only and does not constitute financial advice.