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Calculate Your Debt-to-Income Ratio

Use this guide to calculate your debt-to-income ratio:

Monthly mortgage or rent $
Minimum monthly credit card payments
Monthly car loan payment
Other loan obligations
Total monthly debt payments $

Monthly gross salary $
Other monthly income
Monthly alimony received
Total monthly income $

Debt divided by Income = % ratio

36% or less: This is an ideal debt load to carry for most people. Showing that you can control your spending in relation to your income is what lenders are looking for when evaluating if you are credit-worthy.

37% to 42%: Your debts still may seem manageable, but start paying them down before they begin to spiral out of control. At this level, credit cards still may be easy to obtain, but acquiring loans may be more difficult.

43% to 49%: Your debt ratio is high and financial difficulties may be looming unless you take immediate action.

50% or more: Seek professional help to make plans for drastically reducing your debt before it becomes a real problem.