Debt-to-Income Calculator
Calculate your debt-to-income (DTI) ratio and understand what lenders use to evaluate your creditworthiness.
Debt-to-Income Calculator
Your debt-to-income (DTI) ratio shows what percentage of your income goes to debt payments. Lenders use this to determine your creditworthiness.
Include credit cards, loans, mortgages, car payments, etc.
Income before taxes
How it works: Your debt-to-income (DTI) ratio is what percentage of your gross monthly income goes to debt payments. Lenders use this to determine if you qualify for new credit and what interest rates you'll receive.
Understanding Your DTI Ratio
What's a Good DTI?
Most lenders prefer a DTI below 43%, with some considering up to 50% for qualified borrowers. Here's how lenders view different DTI ranges:
- • Below 36%: Excellent—you're in good standing for new credit
- • 36-43%: Acceptable—you can usually qualify for credit but may get higher rates
- • 43-50%: Struggling—approval becomes harder and rates increase
- • Above 50%: High risk—most traditional lenders will deny you
Why Lenders Care About DTI
Your DTI shows lenders how much of your income is already committed to debt. A high DTI suggests you have little room for new payments and are a riskier borrower. This is why reducing your debt improves your ability to qualify for new credit.
How to Improve Your DTI
There are two ways to improve your DTI: increase your income or decrease your debt payments.
- • Increase Income: Higher income directly improves your ratio
- • Lower Debt: Eliminate debt to reduce monthly obligations
- • Extend Payments: Some strategies stretch payments over longer periods (though total interest increases)
Ready to Improve Your DTI?
Lowering your DTI opens doors to better credit terms and new opportunities. Explore debt relief options that work for you.