Debt to Income Ratio Calculator

Calculate your debt-to-income ratio instantly to manage your financial health.

How to Calculate Debt to Income Ratio

The Debt to Income (DTI) ratio is calculated by dividing your total monthly debt payments by your gross monthly income and multiplying the result by 100 to get a percentage. The formula is as follows:

Debt to Income Ratio (%) = (Total Monthly Debt Payments / Gross Monthly Income) x 100

For example, if your monthly debt payments amount to $1,500, and your gross monthly income is $5,000, your DTI ratio would be:

($1,500 / $5,000) x 100 = 30%

Why Is Debt to Income Ratio Important?

DTI ratio helps lenders determine how well you're managing your debt and if you are eligible for new credit. A high DTI ratio may indicate financial stress, while a lower ratio reflects more manageable debt. Generally, a DTI ratio below 36% is considered healthy.

How to Improve Your Debt to Income Ratio

  • Pay off existing debts or reduce the total debt amount.
  • Increase your gross monthly income by finding additional income streams.
  • Avoid taking on new debt until your DTI ratio improves.