What is Total Debt Servicing Ratio ( TDSR )
The Total Debt Servicing Ratio (TDSR) is a framework implemented by the Monetary Authority of Singapore (MAS) to ensure that individuals do not take on excessive debt commitments relative to their income. It is a measure used by financial institutions to assess a borrower's ability to service their debt obligations.
The TDSR calculates the percentage of a borrower's gross monthly income that is used to service all their debt obligations, including housing loans, car loans, credit card debt, and other outstanding loans. The TDSR framework helps to ensure responsible borrowing practices and maintain financial stability.
Since 2010, government implemented the TDSR to restrict the individual or household total loan amount, the latest TDSR has been lower to 55% from 60% effective from 16th Dec 2021. The TDSR calculation is inclusive of your current total monthly repayment for property loan, Car loan, Credit card and unsecured loan etc.
Calculation for TDSR :
Monthly Income $8,000 x 55% = $4,400
Current monthly repayment : $2,500
Remaining available maximum repayment :
$4,400 - $2,500 = $1,900