Debt To Income Ratio Calculator (DTI)
Use this comprehensive debt to income ratio calculator to get your current financial health status. Gain insights on whether you need to continue what is working for you or change your strategy to improve your current status.
Your Debt to Income Ratio:
How to calculate your debt-to-income ratio
To calculate your debt-to-income (DTI) ratio, follow these steps:
1. Add Up your Monthly Debt Payments:
Include all recurring monthly debt payments, such as:
Mortgage or rent
Credit card payments
Auto loans
Student loans
Personal loans
Any other debts
Example:
- Mortgage: $1,200
- Car loan: $300
- Credit card payment: $100
Total debt payments: $1,600
2. Calculate all your Net Monthly Income:
This is your income after taxes and deductions. If you have multiple income sources, include them all.
Example: Net Salary= $5,000 | Rentals = $500 | Dividends = $120 etc.
Total Net Monthly Income = $5,620
3. Use this Debt-to-Income Ratio Formula:
DTI Ratio = (Total Monthly Debt Payments / Net Monthly Income) * 100
Total Monthly Debt Payments = $1,600
Net Monthly Income = $5,620
DTI Ratio = (1,600 / 5,620) * 100 = 28.47%
4. Interpreting Your DTI Ratio:
- Below 35%: Good
- 35% to 49%: Manageable, but may raise concerns with lenders.
- 50% or more: May face difficulty in getting loan approval
Wondering How Your Debt Measures Up?
Use our Debt-to-Income Ratio Calculator to get a clear understanding of how your monthly debt compares to your income. Whether you’re planning to apply for a loan or just want to check your financial health, knowing your DTI ratio is key. It helps you see where you stand and identify areas for improvement.
It’s simple, fast, and gives you valuable insights with just a few numbers. Take a moment to try it out and get the clarity you need to make informed decisions about your finances!