Debt-to-Income Ratio Calculator

Debt-to-Income Ratio Calculator

How to Use the Debt-to-Income Ratio Calculator

What is a Debt-to-Income Ratio Calculator?

A Debt-to-Income (DTI) Ratio Calculator helps you determine what percentage of your gross monthly income goes toward paying monthly debts — a key indicator used by lenders to assess financial health and creditworthiness.

How to Use the Calculator (Step-by-Step)

Step 1: Enter Your Monthly Debt Payments

  • Include all your recurring monthly obligations:
    • Credit cards
    • Auto loans
    • Student loans
    • Mortgage or rent
    • Personal loans

Example: $1,500

Step 2: Enter Your Gross Monthly Income

  • This is your total income before taxes or deductions.
  • Include income from all sources: salary, freelance, rental, etc.

Example: $5,000

Step 3: Click “Calculate DTI Ratio.”

  • Press the blue button to see your result.

Step 4: Understand the Results

  • You’ll receive:
    • Your DTI ratio as a percentage
    • A helpful message indicating whether your ratio is considered healthy or risky

Example output:

pgsqlCopyEditDebt-to-Income Ratio: 30%
Advice: Good. You are within an acceptable DTI range.

Why Your DTI Ratio Matters

Lenders use your DTI ratio to evaluate your ability to manage monthly payments and repay debts. A lower DTI means you’re more likely to be approved for loans, mortgages, or credit cards with favorable terms.

What’s a Good DTI?

DTI RangeEvaluation
0% – 20%Excellent
21% – 35%Good
36% – 42%Risk Zone (may still qualify)
Over 43%High Risk – often rejected by lenders

FAQ: Debt-to-Income Ratio Calculator

What is the DTI ratio used for?

Lenders use it to assess your financial risk before issuing loans or mortgages.

What’s included in “debt payments”?

All recurring, required monthly debts — credit cards, car payments, loans, mortgage/rent, etc.

Should I use gross or net income?

Use gross income (before taxes and deductions) — this is what lenders typically use.

What is an ideal DTI ratio?

Ideally under 36%, though 43% is usually the max most lenders will accept.

Can this calculator be used for business loans?

No, it’s designed for personal finance only. Business loan applications require different metrics.

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