Debt to Income Ratio Calculator

Debt To Income Ratio Calculator

Excellent! While you should pay off your debt as soon as possible, this debt to income ratio should allow you to live the lifestyle you want without major constraints.
Healthy. You should avoid incurring more debts, and might have a problem getting approved for a mortgage or yet another loan. Still, you are in a relatively good situation.
Troubling. You probably won't get approved for any additional loans; you should start working on a plan that will help you reduce your debts.
Dangerous. Such a debt to income ratio indicates financial trouble. You should devote as much money and energy as possible to pay off your loans.
Extremely Dangerous. More than half of your income is used to pay off debts and mortgages. If you're not following a strict payment plan yet, don't hesitate to consult a financial advisor and get professional help.

What is the Debt to Income Ratio Calculator

The Debt-to-Income Ratio (DTI) calculator is a tool that helps you understand how much debt you can handle. It considers your monthly income before taxes (gross income) and compares it to your monthly debt payments, like rent, car loans, and credit cards.

The calculator gives you a DTI percentage. A lower percentage, generally below 36%, is better for borrowers as it shows lenders you have more money coming in than going out towards debt. This can help you qualify for loans with better interest rates.

How a DTI Calculator Helps You in India

Here’s how a DTI calculator can be a money whiz for you:

  1. Know Your Financial Health: See how much of your income goes towards debt. This helps you understand your overall financial picture.
  2. Plan Your Budget: See how much of your income is already used for debt payments. This lets you plan your spending better and free up money for savings or investments.
  3. Tackle Debt Like a Boss: If you have a lot of debt, the calculator can help you make a plan to pay it off. By knowing your DTI, you can prioritize which debts to tackle first, potentially save on interest, and improve your credit score.
  4. Buy Your Dream Home: Ever dreamed of owning a house? The calculator can help you see if you can afford it. By comparing your DTI to what lenders typically require, you’ll know if you qualify for a mortgage and how much you can borrow.
  5. Spot Trouble Signs: A high DTI might mean you owe too much. The calculator can warn you of this, so you can adjust your spending, explore ways to manage your debt, or look into options to repay it faster.
  6. Make Smart Choices: Thinking about taking on new debt? The calculator helps you see how it would affect your DTI. This way, you can avoid borrowing more than you can comfortably handle.
  7. Track Your Progress: Use the calculator regularly to see how your finances are doing over time. By monitoring your DTI, you can see if your debt management plan is working and make adjustments as needed to reach your financial goals.
  8. Boost Your Credit Score: Keeping your DTI low is good for your credit score in India. This shows lenders you’re responsible with money, which could lead to better loan terms and lower interest rates in the future.

What is the Debt-to-income Ratio?

The Debt-to-Income Ratio (DTI) is basically a way for lenders to see if you can handle your debts. It’s like a financial report card that shows how much you owe each month compared to how much money you make. The lower your DTI, the better you look to lenders. Let’s break it down:

  • Debt: This includes all your monthly payments for things you borrowed money for, like rent or mortgage payments, car loans, student loans, and credit card minimum payments.
  • Income: This is your gross monthly income, which is the amount you make before taxes and other deductions are taken out.

Here’s why DTI is important:

  • For you: A low DTI shows you have room in your budget for other expenses and unexpected costs. It can also help you qualify for better loan terms, like lower interest rates.
  • For lenders: A low DTI tells lenders you’re a responsible borrower who is likely to make your loan payments on time. This makes them more likely to approve your loan application.

How do I calculate Debt To Income Ratio?

Ever wondered how much of your income goes towards debt each month? This is where your Debt-to-Income (DTI) ratio comes in. It’s a simple calculation that helps you understand your financial situation better. Here’s how to figure out your DTI ratio in India:

Step 1: Make A list of your Debt

First, list all your monthly debt payments. This includes:

  • Rent or mortgage payments
  • Car loan payments
  • Personal loans
  • Student loans
  • Credit card debt
  • Any other debts or loan payments you have

Add up all these monthly payments to find your total debt.

Step 2: Find Your Income sources

Now, it’s time to find your income sources – your total monthly income before taxes and other deductions are taken out. This includes all the money you bring in each month, such as:

  • Salary or wages from your job
  • Rental income from any properties you own
  • Income from investments you might have
  • Any other regular income sources you have

Add up all these income sources to find your total earning strength.

Step 3: let’s Calculate DTI

Divide the total your total monthly debt payments by your income your gross monthly income. Then, multiply that number by 100 to express it as a percentage.

Here’s the formula: DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) x 100%

For example, if your debt totals ₹30,000 per month and your income in ₹90,000 per month, your DTI ratio would be:

DTI Ratio = (₹30,000 / ₹90,000) x 100% = 33.33%

Step 4: Understanding Your Debt to Income Ratio Score

Your DTI ratio is a percentage that shows what portion of your income goes towards debt payments each month. Here’s what the score generally means:

  1. DTI below 40%: Congrats! This is generally good in India, meaning you can handle your debts comfortably. 1What is a Good Debt-to-Income Ratio? Website: wellsfargo
  2. DTI between 40% and 50%: Watch out! You have moderate debt. Manage your finances well and avoid new debt.
  3. DTI above 50%: Uh oh! This is a high debt burden. It might be tough to get new loans which could indicate financial stress. Aim to pay down debt to improve your situation.

How to Calculate DTI ratio By using Online Calculator

  1. Enter the Numbers: Plug in your total monthly debt payments (rent, loans, credit cards) and your gross monthly income (income before taxes).
  2. Get Your Score: The calculator instantly gives you your DTI percentage, showing your financial health.
  3. See What You Can Do: Analyze your DTI and think about how you can improve it by adjusting your budget or paying down debt.
  4. Plan Your Future: With your DTI knowledge, you can make informed decisions about saving, investing, or managing debt to reach your financial goals!


  • What if I’m unsure about all my monthly debt payments?

    Gather your latest bills or statements for loans and credit cards. If unsure, contact lenders or check your credit report for a complete list. Include all debts for an accurate DTI.

  • My income varies each month. Which income should I use to calculate my DTI ratio?

    Use an average monthly income based on your earnings over the past few months, or the most stable income figure you have. This gives a more accurate DTI picture.

  • What if my DTI ratio is higher than recommended?

    A high DTI means a lot of your income goes to debt. To improve it, try to:
    1. Earn more (side hustle, higher-paying job)
    2. Spend less (cut unnecessary expenses)
    3. Combine high-interest debts
    4. Negotiate lower interest rates.

  • Can I include non-debt expenses in my DTI calculation?

    No. DTI focuses on debt payments vs. income. But consider these expenses when budgeting.

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