NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Meera has monthly take-home income of Rs 80,000. Her monthly EMIs are: home loan Rs 22,000, car loan Rs 8,000 and personal loan Rs 6,000. What is her debt service ratio based on take-home income?
The debt service ratio is total monthly loan repayments divided by monthly take-home income. Total EMIs are Rs 36,000 against Rs 80,000 income, giving 45 percent. Counting only the home loan would understate the ratio at 27.5 percent.
- A45.0%
- B27.5%
- C35.0%Correct
- D10.0%
Explanation
Total EMIs = 22,000 + 8,000 + 6,000 = Rs 36,000. Ratio = 36,000 / 80,000 = 45%. Wait, recheck: 36,000/80,000 = 0.45, so the correct value is 45%. The 27.5% option counts only the home loan EMI (22,000/80,000).
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