Debt-to-Income Ratio Calculator

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Monthly Debt Payments

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DTI Ratio
0.0%
Status
Total Monthly Debts
$0
Monthly Income
$5,000

DTI Ratio Guide

  • ≤ 36%: Excellent - Ideal for most loans
  • 37-43%: Good - Still acceptable for many loans
  • 44-50%: Concerning - May face lending challenges
  • > 50%: Poor - Serious financial risk

Debt Breakdown

Understanding Your Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is a key financial metric that compares your monthly debt payments to your monthly gross income. This ratio is one of the main ways lenders evaluate your ability to manage monthly payments and repay debts.

Why DTI Matters

Mortgage Approval

Most mortgage lenders prefer a DTI ratio of 43% or lower

Financial Health

Lower DTI ratios indicate better financial stability

Loan Terms

Better DTI ratios often lead to more favorable loan terms

Credit Applications

Lenders use DTI to assess new credit applications

How to Improve Your DTI Ratio

  • Pay down existing debts
  • Increase your income through side jobs or raises
  • Avoid taking on new debt
  • Refinance or consolidate existing debts for lower payments
  • Create and stick to a budget
  • Consider selling assets to pay off debt

What's Included in DTI Calculations

Included Debts

  • Mortgage or rent payments
  • Car loans
  • Student loans
  • Credit card minimum payments
  • Personal loans
  • Child support or alimony

Not Included

  • Utilities
  • Insurance premiums
  • Healthcare costs
  • Food and groceries
  • Entertainment expenses
  • Retirement contributions

Tips for Managing Your DTI

  • Track your monthly debt payments and income carefully
  • Set up automatic payments to avoid missed payments
  • Review your budget regularly to identify areas for improvement
  • Consider debt consolidation if you have multiple high-interest debts
  • Build an emergency fund to avoid taking on new debt
  • Seek professional financial advice if your DTI is too high