DTI Calculator

Know Your Financial Health: Debt-to-Income (DTI) Calculator

DTI stands for Debt-to-Income ratio. It is a financial metric used to assess an individual's or household's financial health and their ability to manage their debt. Here's the formula to calculate DTI:

DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100

Total Monthly Debt Payments: All the monthly financial obligations a person has, including but not limited to mortgage or rent, car loans, credit card payments, student loans, and any other recurring debts.

Gross Monthly Income: Total monthly income before any deductions, such as taxes and other withholdings.

DTI percentage reflects the proportion of a person's income that goes toward paying off their debts. Lenders and financial institutions often use DTI as a key factor when evaluating loan applications. A lower DTI is generally seen as more favorable because it indicates that a person has more income available to cover their debts and is considered a lower credit risk. A higher DTI suggests a higher debt burden and may impact an individual's ability to secure new credit or loans.