For anyone with debt, it’s important to stay on top of your debt-to-income (DTI) ratio. This calculation will tell you how much debt you have compared to your income and can help you determine whether you can afford to take on another loan.
Calculate Debt to Income Ratio
To use the debt-to-income ratio calculator, simply enter your monthly debt and income information into the fields provided.
The calculator will do the rest, and in just a few moments, you’ll know your debt-to-income ratio.
Keep in mind that a higher debt-to-income ratio may be more difficult to manage, so use this tool as one part of your overall financial planning.
How to Calculate Debt to Income Ratio
If you’re thinking of taking out a loan, it’s important to know your debt-to-income ratio. This simple calculation will tell you how much of your income is going towards debt repayments and whether you can afford to take on another loan.
To calculate your debt-to-income ratio, simply divide your total monthly debt repayments by your gross monthly income.
For example, if you have monthly debt repayments of $1,000 and a gross monthly income of $3,000, your debt-to-income ratio would be 33%.
What is a Good Debt to Income Ratio, Canada?
Most lenders like to see a debt-to-income ratio of no more than 36%, so in this example, the borrower would probably be able to afford another loan.
However, it’s important to remember that everyone’s situation is different, so it’s always best to speak to a financial advisor before making any major decisions.