Your DTI ratio compares your total monthly debt payments to your gross monthly income. Lenders use it to measure your ability to manage monthly payments and repay debts.

How to Calculate DTI

The formula is: DTI = Total Monthly Debt Payments / Gross Monthly Income. Your debt payments include your mortgage/rent, car loans, student loans, and minimum credit card payments. Lenders generally prefer a DTI ratio below 43%.

How to Lower Your DTI

There are two ways to lower your DTI: increase your income or decrease your debt. Focus on paying down high-interest debt, like credit cards, first. You can use our financial calculators to check your DTI and create a payoff plan.