Know your borrowing profile
What your debt-to-income ratio means
Your debt-to-income ratio, often called DTI, compares your required monthly debt payments with your gross monthly income. The basic formula is total monthly debt payments divided by gross monthly income, multiplied by 100. If you earn $6,000 per month before taxes and pay $2,000 toward housing, loans, and minimum debt payments, your DTI is about 33%.
Lenders use DTI because it shows how much income is already committed before a new loan is added. Mortgage lenders, auto lenders, personal loan providers, and credit card issuers may all review this number when deciding whether a borrower can handle another payment. A lower DTI usually suggests more breathing room, while a higher DTI can signal that a borrower may be stretched.
The meter uses 36% and 43% as illustrative planning bands, not universal approval limits. Different lenders and loan programs use different criteria. A lower ratio does not guarantee approval.
To lower your DTI, you can reduce monthly debt payments, pay down balances, refinance when appropriate, avoid taking on new loans, or increase stable monthly income. Paying off a small loan entirely can help more than spreading the same money across several balances, because it removes one required monthly payment from the ratio.
Use this calculator by entering gross monthly income first, then each recurring debt payment. The result updates instantly with a color-coded gauge and a short explanation of the range. For a more complete plan, use the payoff calculators after checking DTI to decide which debts may be worth targeting first.
Sources and calculation notes
Our numerical examples use the monthly model described in our methodology. For account rules and terminology, see:
Content updated September 21, 2026. Examples are illustrations, not lender offers or account-specific payoff quotes.