Financial Resource Center


Debt-to-Income Ratio

January 1st, 2021

Comparing your earnings against your spending, also known as a debt-to-income ratio, is one of the most popular approaches for evaluating if you have too much debt. For years, lenders have looked at debt-to-income ratios to get a better grasp on a persons current financial picture to determine credit-worthiness.

Use this calculator to calculate your debt-to-income ratio.

Monthly mortgage or rent
Minimum monthly credit card payments
Monthly car loan payments
Other loan obligations
Total Monthly Debt Payments
Monthly Debt Payments
Annual gross salary
Bonuses and overtime
Other income
Alimony received
Total Monthly Income
Monthly Income
Total Debt Divided by Income
Debt ÷ Income =

Now that you have calculated your debt-to-income ratio, understanding what it means to you is the next step.

  • 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.

If you're concerned about your credit management, ask someone at your credit union for guidance or for referral to a credit counseling agency.

Provision of this calculator is not an offer of credit. Its use in no way guarantees that credit will be granted. This calculator is solely for informational purposes and provides reasonably accurate estimates; the calculations are not intended to be relied upon as actual loan computations.

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