Debt-to-Income Ratio
Discover the key benefits and practical details of glossary.
Debt-to-Income Ratio
Discover the key benefits and practical details of glossary.
Debt-to-Income Ratio
Discover the key benefits and practical details of glossary.
Table of contents
Your debt-to-income ratio (DTI) is the percentage of your monthly income that goes toward debt payments. Lenders use it to assess how much additional borrowing you can handle. You can use it yourself to gauge financial health.
How to calculate your DTIAdd up all monthly debt payments (mortgage or rent, car loan, student loans, credit card minimums, personal loans). Divide that total by your gross monthly income. Multiply by 100 to get a percentage.
Example: €1,500 in monthly debt payments on €5,000 gross income gives a DTI of 30%.
What is a healthy DTI?
Many lenders prefer a DTI below 36%, with no more than 28% going toward housing alone. Above 43%, new credit becomes harder to obtain. If your DTI is high, focus on paying down debt or increasing income before taking on new obligations.
Track your income and spending with bunq Budgeting to understand how debt payments fit into your overall budget.
Table of contents
Your debt-to-income ratio (DTI) is the percentage of your monthly income that goes toward debt payments. Lenders use it to assess how much additional borrowing you can handle. You can use it yourself to gauge financial health.
How to calculate your DTIAdd up all monthly debt payments (mortgage or rent, car loan, student loans, credit card minimums, personal loans). Divide that total by your gross monthly income. Multiply by 100 to get a percentage.
Example: €1,500 in monthly debt payments on €5,000 gross income gives a DTI of 30%.
What is a healthy DTI?
Many lenders prefer a DTI below 36%, with no more than 28% going toward housing alone. Above 43%, new credit becomes harder to obtain. If your DTI is high, focus on paying down debt or increasing income before taking on new obligations.
Track your income and spending with bunq Budgeting to understand how debt payments fit into your overall budget.
Table of contents
Your debt-to-income ratio (DTI) is the percentage of your monthly income that goes toward debt payments. Lenders use it to assess how much additional borrowing you can handle. You can use it yourself to gauge financial health.
How to calculate your DTIAdd up all monthly debt payments (mortgage or rent, car loan, student loans, credit card minimums, personal loans). Divide that total by your gross monthly income. Multiply by 100 to get a percentage.
Example: €1,500 in monthly debt payments on €5,000 gross income gives a DTI of 30%.
What is a healthy DTI?
Many lenders prefer a DTI below 36%, with no more than 28% going toward housing alone. Above 43%, new credit becomes harder to obtain. If your DTI is high, focus on paying down debt or increasing income before taking on new obligations.
Track your income and spending with bunq Budgeting to understand how debt payments fit into your overall budget.