Debt to Income Ratio Calculator

Calculate your DTI ratio to understand your borrowing capacity

Financial Details

Monthly Income

Before taxes and deductions

Rental income, side business, etc.

Monthly Debt Payments

Total minimum payments across all cards

Alimony, child support, etc.

Quick Scenarios:

Your DTI Ratio

0.0%

Excellent

Your DTI ratio is excellent! You have good financial health and should qualify for most loans with favorable terms.

Monthly Overview

Total Monthly Income₹0
Total Monthly Debt₹0
Remaining Income₹0

DTI Components

Front-End Ratio (Housing)0.0%

Ideal: Below 28%

Back-End Ratio (All Debts)0.0%

Ideal: Below 36%

Debt Breakdown

Mortgage/Rent₹15,000 (0%)
Car Loan₹5,000 (0%)
Credit Cards₹3,000 (0%)
Student Loans₹2,000 (0%)

Borrowing Capacity

Additional monthly EMI you can afford based on lender requirements:

Conservative (36% DTI)

Most lenders prefer

₹0
Standard (43% DTI)

Qualified mortgage limit

₹0
Maximum (50% DTI)

Rarely approved

₹0

DTI Ratio Benchmarks

0-20%
Excellent

Strong financial position. Easily qualify for loans with best rates.

21-36%
Good

Healthy ratio. Should qualify for most loans without issues.

37-43%
Fair

Manageable but higher. May face scrutiny or higher rates.

44-50%
Poor

Challenging. Limited loan options. Focus on debt reduction.

50%+
High Risk

Critical. Loan approval unlikely. Immediate action needed.

Typical Lender Requirements

Loan TypeFront-End DTIBack-End DTINotes
Home Loan (Conventional)≤ 28%≤ 36%Traditional 28/36 rule
Home Loan (FHA)≤ 31%≤ 43%More flexible for first-time buyers
Personal LoanN/A≤ 40%Varies by lender
Car LoanN/A≤ 45%Some lenders accept higher DTI
Student LoanN/A≤ 40%Government-backed loans more flexible

Understanding Debt-to-Income Ratio

What is DTI Ratio?

Debt-to-Income (DTI) ratio is the percentage of your gross monthly income that goes toward paying debts. It's one of the key metrics lenders use to determine your ability to manage monthly payments and repay borrowed money. A lower DTI ratio indicates better financial health and higher likelihood of loan approval.

How is DTI Calculated?

DTI Ratio = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Example: If your monthly debts are ₹25,000 and gross income is ₹75,000:
DTI = (25,000 ÷ 75,000) × 100 = 33.3%

Types of DTI Ratios

Front-End DTI (Housing Ratio):

Percentage of income that goes toward housing costs (rent/mortgage, property tax, insurance). Lenders prefer this to be below 28%.

Back-End DTI (Total Ratio):

Percentage of income toward all monthly debt obligations including housing. Most lenders want this below 36%, with 43% being the maximum for qualified mortgages.

What's Included in DTI?

✅ Included in DTI:

  • • Mortgage or rent payments
  • • Car loan payments
  • • Credit card minimum payments
  • • Student loan payments
  • • Personal loan payments
  • • Home equity loan payments
  • • Alimony or child support
  • • Other monthly debt obligations

❌ NOT Included in DTI:

  • • Utilities (electricity, water, gas)
  • • Health insurance premiums
  • • Transportation costs (fuel, parking)
  • • Groceries and food
  • • Entertainment expenses
  • • Savings or investments
  • • Life insurance premiums
  • • Phone/internet bills

How to Improve Your DTI Ratio

Reduce Debt:
  • • Pay off small debts first (snowball method)
  • • Focus on high-interest debt (avalanche method)
  • • Make extra payments when possible
  • • Consider debt consolidation
  • • Avoid taking on new debt
Increase Income:
  • • Ask for a raise or promotion
  • • Take on a side hustle or freelance work
  • • Rent out a room or property
  • • Develop new skills for higher pay
  • • Include all eligible income sources

Why DTI Matters

  • Determines loan eligibility and approval chances
  • Affects interest rates offered (lower DTI = better rates)
  • Influences loan amount you can qualify for
  • Reflects your financial stress level and stability
  • Helps you assess your own financial health
  • Required disclosure for most major loans
  • Can impact credit decisions beyond just loans

DTI vs Credit Score

While both are important, they measure different things:

  • DTI Ratio: Measures your debt burden relative to income. Shows if you can afford new debt.
  • Credit Score: Measures your creditworthiness based on payment history. Shows if you're likely to repay.

You need both a good credit score AND a low DTI ratio to get approved for loans with favorable terms.

⚠️ Important Notes

  • • DTI is calculated using gross income (before taxes), not take-home pay
  • • Lenders may count only a portion of variable income (bonuses, commissions)
  • • Some lenders use credit report data to calculate debt, which may differ from your estimates
  • • DTI requirements vary by lender, loan type, and your overall financial profile
  • • High DTI doesn't automatically disqualify you, but it makes approval harder
  • • For self-employed individuals, lenders may average income over 2 years

💡 Pro Tips

  • • Calculate your DTI before applying for loans to know where you stand
  • • Try to keep your DTI below 36% for best loan terms and financial flexibility
  • • If your DTI is above 43%, focus on debt reduction before taking new loans
  • • Consider making a larger down payment to reduce loan amount and DTI impact
  • • Get a co-signer with lower DTI if you're close to the limit
  • • Don't close credit cards after paying them off (keeps credit utilization low)
  • • Review your DTI annually as part of your financial health checkup