Debt-to-income calculator
Debt-to-income is the share of your monthly pay, before tax, that goes to housing and debt payments. Lenders check it before they approve a loan.
What lenders accept
There is no single cutoff that every bank uses. The CFPB says your ratio is your monthly debt payments divided by your gross monthly income. Gross means before tax.
The CFPB does not set one approval rule at 36%, 43% or 50%. Each lender picks its own line. So the same percent can pass at one lender and fail at another.
This calculator counts your rent so you can plan your budget. A lender’s own ratio can count it differently.
How to lower it before you apply
Your number falls when the monthly payments counted here fall or your income rises. Say John pays off one card that cost him $180 a month. His ratio drops from 43% to 40%.
So clearing one small card can move you a few points. Enter your payments again without that card to see your new number.
A co-borrower’s income counts too. A new car loan the month before you apply pushes your number up.
What it means for a consolidation loan
Consolidating pays off your cards, so their minimums go away. That is why the number often falls.
John pays $420 a month in card minimums. A $14,000 loan over 48 months at the 11.9% bank average from the Federal Reserve G.19 gives him one $368 payment. His ratio drops to about 42%.
So the lender sees a lower number before it decides. Enter the new loan payment in place of your card minimums to see your own. Or call and the specialist runs it with your cards.
How this debt to income calculator figures it
Your ratio is your monthly debt payments divided by your gross monthly income, multiplied by 100. Gross means before tax. The calculator does not apply an approval cutoff, because each lender sets its own.
Put your rent, card payments and income before tax in the debt to income calculator to get your number. $2,250 in monthly payments on $5,200 of income before tax is a 43% ratio. At 43%, some lenders say yes and some say no, because each sets its own line.
The first thing to do is call a specialist. When a consolidation loan pays off your cards, $420 in card minimums can become one $368 payment, so your ratio falls. The specialist shows you how a new loan payment would change your percent.
Worked examples
- $5,200 a month before tax with $2,250 in monthly debt payments is 43%.
- $3,800 a month before tax with $1,900 in monthly debt payments is 50%.
- $7,500 a month before tax with $2,100 in monthly debt payments is 28%.
About this calculator
How is debt-to-income worked out?
Add up your monthly debt payments. Divide that by your monthly income before tax. The CFPB’s example is $2,000 of payments on $6,000 of income, which is 33%.
Is there one percent every lender wants?
No. Each lender sets its own line. The CFPB does not set a 36%, 43% or 50% approval rule.
What lowers my number?
Paying down a debt or raising your income. A co-borrower’s income counts too. A new car loan right before you apply pushes it up.
Can a consolidation loan change my number?
Yes, it often does. The new payment replaces the card minimums it pays off. In the example, $420 in minimums becomes one $368 payment.
Lower your ratio with one payment
You have your number now, and at 43% some lenders say yes while others say no. Card minimums of $420 can become one $368 payment, which pulls your ratio down before a lender decides. Call now and a specialist goes through your cards for free and compares the loans that fit.