DEBT TO INCOME RATIO CALCULATOR
Improve your financial wellness and debt-to-income ratio (DTI)
What is your monthly gross income?
What are your monthly debt payments?
What is your credit card balance (est.)?
Debt To Income Ratio FAQs
What is debt-to-income ratio, and why is it important?
Your debt-to-income (DTI) ratio is all your monthly debt payments divided by your gross (before-tax) income. Your ratio is one way to determine how affordable your debt is at your income level. Lenders can use your DTI ratio to measure your ability to manage your monthly payments and repay the money you’ve borrowed.
What do the DTI ratio results mean?
36% or less:
In general, lenders like to see a DTI ratio under 36%, so a ratio in this range is healthy. Lenders are more likely to work with you on a new loan or line of credit.
37-49%:
A DTI ratio between 37 and 49% is okay—not the best, but not the worst. Depending on the number, you may have fewer loans to choose from and/or pay higher interest rates.
50% or more:
A DTI ratio in this range is considered high, and could mean that your budget is full. Because a new debt payment might be unaffordable, lenders may want you to either reduce your debt or increase your income before providing you with a loan or new line of credit.
Does DTI affect my credit score?
No, DTI doesn’t affect your credit score because credit scoring models don’t consider your income. However, lower DTI often goes hand in hand with good credit scores because it’s easier to have good payment history and low utilization when you carry less debt.
How can I improve my DTI ratio?
There are two ways to lower your DTI:
Reduce your monthly payments, or
Increase your income
To reduce your monthly payments, you might refinance or consolidate some or all of your debt to a loan with a lower payment. If you want to focus on speed, debt avalanches or debt snowballs are proven ways to get rid of debt faster.
