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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Debt Management and Loans

Meera Iyer earns a net monthly income of Rs 80,000. Her existing EMIs are Rs 12,000 (car loan) and Rs 8,000 (personal loan). Her adviser uses a guideline that total EMIs should not exceed 40% of net monthly income. What is the maximum additional EMI she can take on?

She can take on an additional EMI of Rs 12,000. The 40% limit allows total EMIs of Rs 32,000 on Rs 80,000 income, and existing EMIs already use Rs 20,000, so the remaining headroom is Rs 12,000 per month.

  1. ARs 12,000Correct
  2. BRs 32,000
  3. CRs 20,000
  4. DRs 8,000

Explanation

Maximum total EMI = 40% x 80,000 = Rs 32,000. Existing EMIs total 12,000 + 8,000 = Rs 20,000. Additional capacity = 32,000 - 20,000 = Rs 12,000. Rs 32,000 ignores existing obligations, and Rs 20,000 is just the existing EMI total.

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