Financial Calculators

Debt To Income Ratio Calculator

The debt to income calculator, or DTI calculator for short, is an invaluable tool for anyone who has taken out any type of loan. This calculator will show you how much debt you have and whether you can afford another loan.

debt to income ratio calculator

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Advanced
$ / month
$ / month
Debt-To-Income Ratio
? %

Table of contents

How do you calculate the debt-to-income ratio?
Interpreting the results

How do you calculate the debt-to-income ratio?

DTI (debt-to-income) is a measure how indebted you actually are. It is calculated in relation to your regular income. A $200 monthly payment can be burdensome for some people, but millionaires will not notice it.
Mathematically, DTI can be described as your monthly debt (recurring each month), expressed in percent.
DTI = debt / income * 100%
If you earn $2000 per month and your monthly car loan payment is $500, your DTI can be calculated as follows:
$500 / $2000 * 100% = 25%
You can also use the advanced calculator to determine if you are eligible for an additional loan. As an example, let's assume your bank allows you to have maximum DTI of 33%. You can easily determine the maximum loan amount by calculating your monthly debt (currently $500) and your income.
33% * $2000 = $660 is the maximum total amount of debt.
$660 - $500 = $160 is the additional loan that you are allowed to take.

Interpreting the results

Once you have an idea of what your DTI is, it's time to evaluate the result. The lower the DTI, the better. After all, you want to spend as little as possible on your debts. The following guidelines can be used if you are unsure:
DTI < 20%: excellent! Although you should get rid of your debts as soon as you can, the debt to income ratio should be able to allow you to enjoy the lifestyle you desire without any major restrictions.
Healthy DTI ranges between 20-36 percent. Avoid increasing your debts. You might not be approved for a mortgage loan or another loan. You are still in a good place.
DTI between 37% & 42%: This is troubling. It is likely that you won't be approved for additional loans. Instead, you should begin to work on a plan to reduce your debts.
DTI between 43%-49% is dangerous. Such a debt to income ratio indicates financial trouble. To repay your loans, you should spend as much time and money as possible.
DTI above 50% is extremely dangerous. Your income should not exceed half to pay off your mortgages and debts. You don't have to follow a strict payment schedule if you aren't following one. Consult a financial advisor for professional guidance.

Parmis Kazemi
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Parmis Kazemi
Parmis is a content creator who has a passion for writing and creating new things. She is also highly interested in tech and enjoys learning new things.

Debt To Income Ratio Calculator English
Published: Thu Jul 07 2022
In category Financial calculators
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