What DSR is and how banks calculate it

The formula

DSR is the money that goes out on debt each month, divided by the money coming in, times 100. Someone with RM 6,000 of monthly income who repays RM 1,500 a month on debts has a DSR of 25%.

The lower the figure, the more room a bank sees for a new loan. DSR says nothing about whether someone pays on time. It only measures how full the monthly budget already is.

What goes in the top line

Bank Negara says that in Malaysia DSR covers loans from banks and from non-banks. PIDM gives PTPTN, AEON Credit and Courts FlexiPlan instalments as examples of non-bank commitments. CIMB lists housing, car and personal loans, credit card minimum payments and education loans, and notes that buy now pay later plans may also count.

Living costs are not in DSR, but many banks look at them another way. Bank Negara notes that lenders also rely on net disposable income, which is income minus loan repayments, to see what is left for daily expenses.

Credit cards need care. A card usually shows an instalment of 0.00 on a credit report, yet it is not free. Bank Negara requires card issuers to ask for a minimum monthly payment of at least 5% of the outstanding balance, plus the instalments on any easy payment plan on the card. So RM 8,000 owing on a card with no plans means a RM 400 minimum. Banks differ on whether they count a card by its balance or by its limit, so ask which one.

Net or gross: why two banks give two answers

Bank Negara describes DSR as the part of a borrower's monthly net income, meaning gross income minus tax and other statutory deductions, that is used to repay debt. Bank Negara's guidance on responsible financing asks lenders to assess income after statutory deductions for tax and EPF. PIDM, CIMB and CTOS describe the same net basis.

Quick calculators, ours included, often work on gross income because it is the figure customers know. Ours always divides by the gross income you type and compares the result with its own marker, 60% under RM 5,000 of gross income and 80% from RM 5,000. That marker is a rule of thumb in our tool. It is not a Bank Negara limit and it is not any bank's limit. Gross income gives a lower number than a bank working on net income, as the picture shows.

So before you quote a DSR, ask which income the bank uses and how it treats commission, allowances and bonus. Banks differ, and the gap between the two figures is large enough to change an answer.

There is no single limit

Bank Negara's guidance asks banks to judge affordability on a prudent DSR. The documents we read give no one number for every loan, and PIDM, CIMB and CTOS all say each bank sets its own. The limit can also move with the type of loan, the income and the customer's profile.

For orientation only: PIDM says banks generally accept a DSR below 60%, and CIMB says most banks prefer under 60% while some accept more, sometimes with extra proof of income. In a 2024 review of household debt, Bank Negara grouped borrowers above 60% as high-DSR for its stress tests. That tells you where regulators see risk rising. It does not tell you what your bank will accept.

Questions to ask a bank before you quote a figure

1. Do you work on net income or gross income, and which deductions do you take off?
2. How do you count commission, allowances and overtime: in full, averaged over how many months, or at a percentage?
3. Do you count a credit card by its balance or its limit, and at what percentage?
4. How do you count a joint loan: in full on each borrower, or shared?
5. Do you include koperasi loans, buy now pay later and other non-bank instalments, and how do you find them?
6. What DSR limit applies to this loan type and this income?

Working it out from a credit report

The monthly figures come from the customer's CCRIS record: the instalment for each loan and a minimum payment for each card. Add the debts CCRIS does not show, such as koperasi deductions and some instalment plans. PTPTN and AEON Credit are on Bank Negara's list of reporting institutions, so check whether they already appear before you add them. The CTOS report guide shows where each of these sits on the page.

The CTOS analyzer on our homepage does the sum from a CTOS, eCCRIS or Experian PDF in your browser, and lets you tick debts to settle to see the effect. It works on the gross income you type, so treat the result as a first look and confirm it with the bank's own method.