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Your debt-to-income (DTI) ratio and credit history are two important financial health factors lenders consider when determining if they will lend you money.
To calculate your estimated DTI ratio, simply enter your current income and payments. We’ll help you understand what it means for you.
Please note this calculator is for educational purposes only and is not a denial or approval of credit. The accuracy of the DTI calculation is based on the accuracy and completeness of the information provided by you.
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Your DTI ratio
Your DTI ratio should help you understand your comfort level with your current debt situation and determine your ability to make payments on any new money you may borrow. Remember, your DTI is based on your income before taxes - not on the amount you actually take home.
Your DTI ratio is looking good
35% or less
Relative to your income before taxes, your debt is at a manageable level. You most likely have money left over for saving or spending after you’ve paid your bills. Lenders generally view a lower DTI as favorable.
Other DTI ranges
You have an opportunity to improve your DTI ratio
36% - 49%
It appears you are adequately managing your debt, but you may want to consider lowering your DTI. This could put you in a better position to handle unexpected expenses. If you’re looking to borrow, keep in mind that lenders may ask for additional eligibility factors.
Other DTI ranges
You should take action to improve your DTI ratio
50% or more
With more than half your income before taxes going toward debt payments, you may not have much money left to save, spend, or handle unexpected expenses. With this DTI ratio, lenders may limit your borrowing options.
Other DTI ranges
Your next step
Before taking on any new debt, estimate the monthly payment for any new credit options and recalculate your DTI ratio so you can see how the new payment may change your result.
If you are looking to borrow, find credit options that may meet your specific needs.
Compare Borrowing Options
Consider paying off your debts sooner. It may improve your DTI ratio faster, freeing up some money in your budget for more saving or spending.
Pay Off Debt Faster
Get a little extra cash back in your wallet by lowering your monthly payments and adequately managing your debts.
Lower Your Monthly Payments
Your DTI ratio history
Before deciding to borrow money
Before applying for new credit, consider whether any of your current credit accounts may meet your needs.
If you decide to apply, consider the 2 main factors lenders look at when they evaluate your application:
- Debt-to-income ratio. Remember, the DTI ratio calculated here reflects your situation before any new borrowing. Be sure to consider the impact a new payment will have on your DTI ratio and budget.
- Credit history and score. The better your credit score, the better your borrowing options may be. Your credit score is based on your consumer credit report, so be sure it’s accurate before borrowing.
Other things to consider before you borrow
This calculator is for educational purposes only and is not a denial or approval of credit.
When you apply for credit, your lender may calculate your debt-to-income (DTI) ratio based on verified income and debt amounts, and the result may differ from the one shown here.
You do not need to share alimony, child support, or separate maintenance income unless you want it considered when calculating your result.
If you receive income that is nontaxable, it may be upwardly adjusted to account for the nontaxable status.
QSR-0623-03006
LRC-0523
Debt-to-Income (DTI) ratio
Your DTI ratio compares how much you owe with how much you earn in a given month. It typically includes monthly debt payments such as rent, mortgage, credit cards, car payments, and other debt.
Annual income before taxes
Include any pre-tax and non-taxable income that you want considered in the results.
Total monthly debt payments
Monthly debt payments are any payments you make to pay back a creditor or lender for money you borrowed. Rent is also considered a monthly debt payment.
Other monthly debt payment
Include alimony, child support, or any other payment obligations that qualify as debt.
