30% EMI Rule: Everyone dreams of having their own house, own car. The bank also offers easy loan for this. But have you ever wondered how much of your salary should be spent on EMIs, so that your lifestyle does not have any significant impact? If you are also confused about this matter, then 30% EMI formula can be useful for you.

Needs will also be met with savings

The 30% rule says that the total EMI of all your loans should not be more than 30 percent of your monthly salary. Whenever you take a loan while buying a house or a car, the bank gives you 40-50 percent depending on your income, but keeping in mind the financial stability and future stability, experts ask you to follow the rule of 30 percent only.

The 30% EMI rule includes everything from home loan to car loan, personal loan and credit card EMI. Understand it this way – if your salary is Rs 1,00,000, then Rs 30,000 should be spent in EMI at the rate of 30 percent. The remaining 70 percent amount should be reserved for household needs and emergency fund.

Benefits of 30 percent rule

• Even in case of job loss or emergency, you should have enough money to pay EMI.
• By fixing the EMI limit, timely payments will be made, the effect of which will be visible on your CIBIL score.
• If your credit score is good and debt-to-income ratio is low, the bank will give you the loan immediately.
• This formula does not affect your investment. With this you become financially strong.

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