Can you actually afford another payment?
Your debt-to-income ratio is the first thing an underwriter looks at, and it is worth knowing before they tell you. It is also the honest version of the question a loan application never asks: not whether someone will lend to you, but whether they should.
Esta calculadora también está en español: Relación deuda-ingreso
Debt-to-income check
Rent or mortgage, car, student loans, card minimums, existing loans. Not groceries or utilities.
Before tax, from all sources. Gross is what lenders use.
Debt-to-income ratio
20.0%
One caution worth keeping in view: DTI counts contractual debt only, so a 36% ratio does not leave 64% of your income free. Food, transport, utilities, and tax all come out of the remainder. A figure that looks acceptable on paper can still be unaffordable in a real month.
The arithmetic
DTI = monthly debt payments ÷ gross monthly income × 100
On $800 of debt payments against $2,500 gross income, the ratio is 32%.
Count these
- Rent or mortgage payment
- Car loan or lease payment
- Student loan payments
- Minimum credit-card payments
- Existing personal or installment loans
- Child support or court-ordered payments
Leave these out
- Groceries and household spending
- Utilities, phone, and internet
- Insurance premiums
- Fuel, transit, and childcare
- Subscriptions
Those exclusions matter more than they appear. A 36% DTI does not leave 64% of your income free — everything on the second list, plus tax, comes out of the remainder.
What the number means
Debt payments take a small share of income. There is room to absorb a surprise without borrowing to cover it, which is the practical definition of financial slack.
Within the conventional guideline, but a new payment could push you past it. Worth modelling the exact figure before applying rather than after.
Above the threshold most underwriters prefer. Approval becomes harder and more expensive, and a single missed paycheque starts to cascade. Consider whether the expense can be deferred or split instead.
More than half of gross income is committed before food or fuel. At this level new borrowing usually funds old borrowing. Free nonprofit credit counselling is a better next step than a new loan.
A loan is rarely the first option.
Our tools and referral service are free to use. Partners pay us for completed forms submitted through /apply-now/. Whether a submission qualifies for payment, and the amount paid, depend on the partner's criteria. A completed form is not a loan approval or a promise of funding. Compensation does not change our calculator results. We are telling you to try these first anyway, because at a strained DTI a new payment usually makes the arithmetic worse rather than better.
Ask the biller before the due date
Utility, medical, and municipal providers grant hardship plans routinely, and almost always more readily before a missed payment than after. It costs one phone call and no interest.
Check a credit union
Payday Alternative Loans are capped at 28% APR by federal rule. Membership requirements are usually modest and often geographic.
Ask payroll about earned-wage access
Many payroll providers now advance wages already earned, at little or no cost. One email to HR establishes whether yours does.
Talk to a nonprofit counsellor
NFCC-affiliated agencies generally consult free and can renegotiate existing debts. This is the step people take last and most often wish they had taken first.
Questions about DTI
How do I calculate my debt-to-income ratio?
Add up your required monthly debt payments — rent or mortgage, car loans, student loans, minimum credit-card payments, existing personal or installment loans, and court-ordered obligations such as child support. Divide that total by your gross monthly income, before tax. Multiply by 100 for a percentage. If you pay $800 in debts against $2,500 gross income, your DTI is 32%.
Does DTI include utilities, groceries, or insurance?
No. DTI counts contractual debt obligations, not living expenses. That is worth remembering, because it means a 36% DTI does not leave 64% of your income free — food, transport, utilities, and tax all come out of what remains. A ratio that looks acceptable on paper can still be unaffordable in practice.
What DTI do lenders actually require?
It varies by product and lender. Conventional mortgage underwriting typically wants 36% or below, with some flexibility to 43% or higher. Small-dollar and installment lenders often accept considerably more, because their pricing accounts for the added risk. The important point is that a lender's willingness to approve you is not the same as a payment being affordable — those are two different questions, and only one of them is theirs to answer.
Should I use gross or net income?
Gross, because that is what lenders use and it lets you compare your figure against published thresholds. But run the arithmetic on net income too, privately. Net is the money that actually exists, and the gap between the two ratios is a fair measure of how much optimism is built into the standard calculation.
My DTI is high. What should I do before borrowing?
Three things in order. First, ask whether the expense can be deferred, split, or negotiated — utility and medical providers grant hardship plans far more often than people expect, and asking costs nothing. Second, check whether a credit union will lend at a Payday Alternative Loan rate, capped at 28% APR by federal rule. Third, contact a nonprofit counselling agency affiliated with the NFCC; their initial consultation is generally free and they can often renegotiate what you already owe.
Does a high DTI hurt my credit score?
Not directly — DTI is not a scoring input, because credit files do not contain your income. But credit utilisation is a major factor, and the behaviours that raise DTI often raise utilisation too. Lenders assess both separately: the score decides whether they will lend, DTI decides how much.
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Calculators and guides on this site are educational estimates, not offers of credit and not financial, legal, tax, or credit advice. Actual terms depend on the lender, your state, verification, underwriting, and applicable law. StraightSum is not a lender, loan broker, or credit services organization. We do not make credit decisions, issue funds, set rates or fees, guarantee approval, or service loan accounts.