How to assess your debt burden: a step-by-step checklist

The debt burden ratio (DBR) is one of the key parameters that lenders consider when reviewing an application. It shows what portion of your monthly income you allocate to repaying all current obligations. The higher the burden, the more cautiously a bank or MFO will assess your creditworthiness.

This material is a general checklist to help you estimate your debt burden on your own. We do not provide specific figures, threshold values, or approval guarantees because every lender uses its own calculation methodology. The date of verification for official sources is not specified, so all statements are for informational purposes only and require clarification before making a financial decision.

What is debt load

Debt load is the ratio of your monthly payments on all loans, borrowings, credit cards, and other financial obligations to your monthly income. In Russia, this indicator is often called DIR (debt-to-income ratio). Banks and microfinance companies are required to calculate it when issuing new loans or borrowings to assess whether the borrower will find themselves in an excessively risky position.

Calculations may include not only active loans, but also credit card limits, guarantees, alimony obligations, and other regular payments. The exact list depends on the specific lender's internal methodologies and regulatory requirements.

Why assess your debt load before applying

Preliminary assessment helps you understand how likely your application is to be approved and how comfortable the new payment will be for your budget. If your debt load is already high, adding a new obligation can lead to delinquencies, penalties, and a damaged credit history.

In addition, knowing your debt-to-income ratio will help you more mindfully choose the amount and term of a future loan, and, if necessary, take steps in advance to lower it.

How to approximately calculate your debt-to-income ratio

Every lender keeps their exact formula secret, but the general principle is as follows:

1. Add up all mandatory monthly payments for loans, microloans, credit cards (even if you do not use the full limit, a certain percentage of it may be taken into account), alimony, and other regular financial obligations.
2. Determine your confirmed monthly income (salary, pension, stable additional earnings).
3. Divide the total payments by your income and multiply by 100%.

For example, if you pay 15,000 RUB per month for all obligations and your income is 50,000 RUB, your debt-to-income ratio will be 30%. But remember: a lender may calculate income differently (for example, net of taxes or applying downward coefficients to unofficial income) and also add the future payment for the requested loan to the calculation.

Important: we do not specify a "safe" or "critical" percentage because every bank has its own thresholds, and they can change.

Checklist for self-assessment

Before submitting an application, go through this list:

— Make a complete list of all active loans, microloans, and credit cards.
— Request your credit history (this can be done for free twice a year through credit history agencies).
— Calculate the total monthly payment for all obligations.
— Estimate your stable income for the past few months.
— Compare the total payments with your income.
— Consider how much your debt-to-income ratio will increase after adding a new payment.
— Keep in mind that a lender may use not all declared income, but only the officially confirmed part.
— If you are planning a large purchase on credit, check whether the total burden will exceed a level that is comfortable for you.

This checklist does not guarantee approval, but it helps you soberly assess the situation.

What to do if your debt-to-income ratio is high

If your estimates show that your debt burden is already significant, consider several options:

— Pay off some small obligations early to reduce your monthly payment.
— Refinance your current loans — combine several into one with a lower interest rate and possibly a lower monthly payment.
— Increase your confirmed income (for example, provide a certificate of additional earnings if it is official).
— Postpone taking a new loan until your financial situation improves.
— Apply for a smaller amount or a longer term — this can reduce your monthly payment, but will increase the total overpayment.

Remember that even with a high debt burden, some lenders may approve your application, but on less favorable terms. Always compare multiple offers and read the agreement carefully.

How to approach the choice

Choosing a credit product with a high debt burden requires special caution. First, assess your debt burden using the checklist above. Then compare several offers from different banks and MFIs, paying attention to the full cost of the loan, rather than just the interest rate. Clarify what requirements a specific lender has regarding the debt-to-income ratio — this information may be published on their website or in the product terms. Do not apply to multiple places at the same time to avoid damaging your credit history with numerous inquiries. And be sure to check that the new payment will not lead to overdue payments on current obligations.

Risks and verification questions

A high debt burden increases the risk of application denial. If the loan is approved anyway, the interest rate may be higher and the amount smaller than requested. In case of delinquency, fines and penalties are charged, and information is transmitted to credit history agencies, which will make it harder to get new loans in the future. With an excessive burden, there is a risk of falling into a debt trap, where new loans are taken to pay off old ones. Before signing the agreement, be sure to review the payment schedule, the full cost of the loan, and all fees. If you feel that you cannot cope with your debts, consider credit holidays or restructuring — conditions depend on the specific lender and are regulated by law.

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