What Is DSR? Debt Service Ratio Explained for Malaysian Borrowers
DSR is the ratio between your monthly debt commitments and your monthly income. The lower the DSR, the more headroom a bank sees for you to repay a new loan.
DSR in plain language
DSR, or Debt Service Ratio, is the percentage of your monthly income already going to debt repayments. If your gross income is RM5,000 and monthly debt commitments are RM2,000, your DSR is 40%.
Banks use DSR as a first affordability screen. It does not guarantee approval, but a DSR that runs too high usually makes the application harder.
The DSR formula
The base formula is simple: divide your total monthly debt commitments by your monthly income, then multiply by 100.
- DSR = (total monthly debt commitments / monthly income) × 100
- Commitments include home loans, car loans, personal loans, PTPTN, credit cards, and other fixed instalments.
- Some banks use net income after statutory deductions; some public calculators use gross income as a first-pass estimate.
Why DSR matters before you apply
DSR helps you see whether a new loan instalment still makes sense after your existing debts. If your ratio is already high, the bank may ask for more documents, reduce the loan amount, or decline outright.
For your own planning, run the DSR before you pay a booking fee on a property, place a deposit on a car, or apply for a personal loan. It gives you an early read on how much room you actually have.
Common questions
Is DSR the same as a credit score?+
No. DSR measures repayment capacity from income and commitments. A credit record looks at your repayment history and overall credit behaviour. Banks consider both, but they are different lenses.
Do I include PTPTN in DSR?+
Yes. If you are repaying PTPTN or have an instalment scheduled, count that monthly amount as a commitment in your DSR.