Debt-to-Income Ratio
Understand your financial health by comparing your monthly debt with your income.
Debt-to-Income Ratio
Compare your monthly debt with your income
How to use the Debt-to-Income (DTI) Calculator
Your Debt-to-Income (DTI) ratio is a key indicator of your financial health. It compares how much you owe each month to how much you earn. Standard lenders use this number to determine your eligibility for new credit.
To calculate your ratio, start by entering your Monthly Gross Income—this is your income before taxes and deductions.
Next, use the Debt Section to add up all your monthly debt obligations. This includes Home Loan EMIs, Car Loans, Credit Card minimum payments, and any other personal loans. You can add as many rows as needed.
The calculator will provide a status: Healthy, Moderate, or Risky. This helps you understand how a bank might view your application for an additional loan.
Formula Explained
The DTI calculation is simple but essential for understanding borrowing capacity:
Excellent borrowing capacity.
Lenders may be cautious.
Difficulty in securing new credit.
Banker's Tip: Lenders often use the "36% rule" as the max DTI for mortgage approvals. Keeping your ratio low increases your negotiating power for lower interest rates.
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