Debt to Income Ratio Calculator

Staying within your limits will help you from going over the edge

Debt To Income
$
$

%
Excellent! While you should pay off your debt as soon as possible, this debt to income ratio should allow you to live the lifestyle you want without major constraints.
Healthy. You should avoid incurring more debts, and might have a problem getting approved for a mortgage or yet another loan. Still, you are in a relatively good situation.
Troubling. You probably won't get approved for any additional loans; you should start working on a plan that will help you reduce your debts.
Dangerous. Such a debt to income ratio indicates financial trouble. You should devote as much money and energy as possible to pay off your loans.
Extremely Dangerous. More than half of your income is used to pay off debts and mortgages. If you're not following a strict payment plan yet, don't hesitate to consult a financial advisor and get professional help.

Tell me when to go…and tell me when to stop

Evaluate and elevate your financial health by comparing your monthly debts to your gross income

Maintain a Low Credit Utilization

Aim to keep your credit card balances below 30% of your available credit limits across all cards to demonstrate responsible credit use and maintain a healthy credit score, which indirectly affects your debt-to-income (DTI) ratio by enabling better loan terms.

Limit New Debt

Before taking on new loans or increasing credit card debt, consider the impact on your DTI ratio. Avoid accumulating debt for non-essential expenses to keep your ratio low.

Increase Your Income

Boosting your monthly income can improve your DTI ratio. Look for opportunities for career advancement, take on a side job, or explore passive income streams to raise your earnings.

Regularly Monitor Your Debts

Keep a close watch on your debt levels, regularly reviewing and managing your loans and credit card balances. Awareness and control are key to maintaining a healthy DTI ratio.

Focus on Debt Repayment

Prioritize paying down existing debt, especially high-interest loans and credit cards. Consider strategies like the debt snowball or avalanche methods to efficiently reduce your debt.

Create and Stick to a Budget

Establish a comprehensive budget that accounts for all your income and expenses, including debt repayments. A well-planned budget helps you live within your means, avoid accruing additional debt, and allocate extra funds toward reducing your current debts.

Frequently Asked
Debt to Income Ratio Questions

DTI is not the same as UTI but not knowing may sting a little

What is a Debt-to-Income (DTI) Ratio?

A Debt-to-Income (DTI) ratio is a financial measure that compares the total amount of your monthly debt payments to your gross monthly income. It is expressed as a percentage and is used by lenders to assess your ability to manage monthly payments and repay borrowed money.

How is DTI Ratio Calculated?

To calculate your DTI ratio, add up all your monthly debt payments—including loans, credit card payments, and any other debt—and divide the total by your gross monthly income (the amount you earn before taxes and other deductions). Multiply the result by 100 to get a percentage.

Why is DTI Ratio Important?

Your DTI ratio is a key indicator of your financial health and is critically assessed by lenders when you apply for a mortgage, loan, or credit card. A lower DTI ratio suggests a good balance between debt and income, making you more likely to be approved for credit and possibly qualify for lower interest rates.

Your Content Goes Here

Subscribe to LovNmoney

Stay up to date on the world of finances and dating. Whether you’re single, married or divorced, we have something for you.