What’s Your Debt-to-Income Ratio? Calculate Your DTI


NerdWalletOctober 8, 2019




  • Each lender sets its own DTI requirement.

  • Personal loan providers generally allow higher DTIs than mortgage lenders.

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How to calculate your debt-to-income ratio




A debt-to-income ratio of 20% or less is considered low. The Federal Reserve considers a DTI of 40% or more a sign of financial stress.

Track your debt the easy way


How lenders view your debt-to-income ratio






» MORE: Learn how to pay off debt in three steps

Does your DTI affect your credit score?





What your debt-to-income ratio means for your debt

Your DTI can help you determine how you should handle your debt and whether you have too much debt.

Here’s a general rule-of-thumb breakdown:

  • DTI of 0% to 14.9%: You can probably take a do-it-yourself approach to paying down debt. Consider using the debt avalanche or debt snowball method.

  • DTI of 15% to 39%: If you have primarily credit card debt, look into a debt management plan from a nonprofit credit counseling agency. You may also want to consider credit card debt consolidation. If you are closer to the higher end of this range, seek a free consultation with a nonprofit credit counselor and a bankruptcy attorney to understand all of your debt relief options.

  • DTI of 40% or more: Look into debt relief options, such as bankruptcy.
