Loans and debts·100 questions

QUESTION: Как снизить долговую нагрузку (DTI) перед новым кредитом?

Answer

Reducing the debt load, or the DTI ratio, is a critically important step if you plan to take out a new large loan, mortgage, or auto loan. Banks carefully evaluate the ratio of your monthly income and mandatory payments on all existing debts.

The most effective way to improve this indicator is to completely close the smallest loans and consumer borrowings. Even if the monthly payment on them seems insignificant, the very presence of multiple active obligations negatively affects the bank's decision. Also, be sure to pay attention to your credit cards: even if they lie at home unused, banks take the entire amount of the maximum limit into account as potential debt. It is recommended to close unnecessary credit cards or write an application for a significant reduction of the credit limit on them.

To systematically improve your financial situation and reduce the burden, use the following recommendations:

Try to increase your official confirmed income by providing the bank with certificates of additional sources of earnings or side hustles.
Consider the refinancing procedure, which allows you to combine several expensive loans into a new one with a lower rate and extended term.
Temporarily give up using any new installment plans, microloans, and credit products so as not to spoil the statistics before submitting an application.

Targeted work on reducing debt obligations demonstrates your financial discipline. This will allow you not only to successfully pass credit scoring, but also to get a more comfortable interest rate on the new loan.

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