What is a Debt to Income Ratio Calculator?
This Debt to Income Ratio Calculator or Debt Calculator is a financial tool used to calculate your Debt Ratio amount using a Debt vs. Income formula. This ratio of total debt is given as a percentage of the user's total gross income.
Who needs a Debt to Income Ratio Calculator?
You do. This Debt Ratio Calculator is a tool used by financial institutions as well as potential home buyers who would like to easily determine the amount of debt they have in comparison to their monthly gross income.
Below 37% - Ideal
Below 37% - If your debt to income ratio is below 37%, lenders are likely to view you as a credit worthy potential borrower.
37% - 42% - This amount of debt to income ratio is acceptable as your debt is still manageable, but you are likely to be more restrifcted by your lenders and could suffer higher interest rates.
43% - 49% - This is a high percentage of debt to income ratio and you should start lowering your debt now to avoid future credit damage.
50% or higher - Your debt is a major obstacle now and you may need to seek professional financial assistance as an effort to aggresively lower your debt.
Why would a lender need to know my Debt to Income Ratio?
The debt to income ratio is needed by the financial institution to determine the borrower's capability to make the monthly payment s on a loan. The ratio gives the lender an idea of your monthly financial obligations that you already have.
What other financial tools are available here?
In addition to the Debt to Income Ratio Calculator above, we have created a list of helpful financial tools to assist our users in journey toward successful money management. These calculators include:
How does the Debt to Income Ratio Calculator work?
To find your debt ratio percentage, mortgage lenders using this calculator or users just like yourself enter their total monthly gross income as well as their total monthly debt including credit card debt. We calculate this information using a simple mathematical formula that divides your debt into your gross income to reveal your debt ratio as a percentage.
Mortgage Calculator - also known as a Mortgage Payment Calculator is a financial tool used to calculate the Estimated Mortgage Payment of a Home Loan based on Home Value, Loan Amount, Interest Rate and other variables.
Equity Line of Credit Calculator - an Equity Loan Calculator that you can use to determine the amount of an Equity Loan that you may qualify for based on the amount of Equity you have in your Home.
Extra Payments Calculator - used to determine the amount of principal you save on the life of your loan based on the amount of Extra Mortgage Payments you make.
How Much Can I Afford Calculator - a tool used by people who would like to know How Much House or How Much Mortgage they can afford. Your input into the Home Calculator helps us easily determine How Much House you can afford.
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Refinance Calculator - display a clear comparison between your current loan and a Mortgage Refinance Loan based on your input.