AKG Money

Toh Sach Kya Hai? EMI health check

Phone on EMI, laptop on EMI, a car loan and a card EMI or two. Each one feels small. Add them up and see whether your EMIs are under control.

These are example numbers. Change any of them to see your own answer.

Your money each month
₹

= ₹1 L

Home, car, personal and card EMIs, including no-cost EMIs and buy-now-pay-later.

₹
EMIs

Bank balance, FDs you can break and liquid funds. Not PF, property or gold.

₹
Be honest
Did you have the money to pay in full for your last EMI purchase?
Did you pick EMI because it felt like you were keeping your money?
Have you ever delayed an EMI or struggled to pay one?
Do you always pick no-cost EMI, even when you have the cash?
Do you feel “everyone takes EMIs now, so it's smart”?
At risk

EMIs take 40% of your take-home pay, and your savings would cover them for 2.3 months. A job loss or medical bill could quickly turn into missed payments.

EMIs as a share of pay
40%
Watch this. Under 30% is healthy; above 40% is risky.
Months your savings cover your EMIs
2.3
Watch this. Aim for 6 or more; under 2 is fragile.
Buy-now-cry-later score
7 of 8
Needs action. 5 or more means EMIs are driving your spending.

What would help

  • Bring EMIs under 30% of pay: that means about ₹10,000 less a month. Close the smallest loans first, and take no new EMIs until then.
  • Build a cushion of six months of EMIs: about ₹1,50,000 more in a savings account, sweep FD or liquid fund.
  • A delayed EMI hurts your credit score for years. Set up auto-debit a few days after payday, not before it.
  • If you have the cash, no-cost EMI only helps when the money you keep is invested and earns more than the GST and fees. Otherwise pay in full.
  • Try a 48-hour rule: wait two days before any purchase on EMI. Most of the urge passes.
Your EMIsAt risk

How this is worked out

  1. EMI-to-income = all monthly EMIs ÷ monthly take-home pay. Up to 30% is healthy, 30–40% is strained, and above 40% is risky. Banks often stop lending around 50%.
  2. Savings cushion = savings you can use right away ÷ monthly EMIs: how many months you could keep paying if your income stopped. Six months or more is comfortable; under two is fragile.
  3. Buy-now-cry-later score (0–8): one point each for choosing EMI when you had the cash, for feeling you were keeping your money, for always picking no-cost EMI, and for “everyone does it”; two points for ever struggling to pay; and a point for every three EMIs running (up to two).
  4. Your overall result is the weakest of the three.

Questions people ask

What is a safe EMI-to-income ratio in India?

Up to 30% of take-home pay is comfortable for most households. A home loan can push it to 40% if there are no other EMIs. Above that, one surprise expense can lead to a missed payment.

Should I count my home loan EMI?

Yes. Count every EMI that leaves your account each month: home, car, personal, education, card EMIs, no-cost EMIs and buy-now-pay-later.

Which loan should I close first?

Usually the one with the highest interest rate: card EMIs and personal loans before a car loan, and a car loan before a home loan. Closing a few small EMIs also frees cash flow quickly.

Why does the score ask about feelings?

Because EMI trouble usually starts with habits, not one big purchase. Buying on EMI when you have the cash, or because it feels normal, is how small EMIs pile up.

Is my data saved anywhere?

No. Everything is worked out in your browser. Your answers stay on your own device and are never sent anywhere.

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