Debt ratio tool
Calculating your debt-to-income ratio can help you determine if you are at ease with your current debt.
Calculation of the debt ratio
In addition to your credit score, your debt-to-income ratio is an important element of your overall financial health. Calculating your debt-to-income ratio can help you determine if you are comfortable with your current debt level.
Use our debt-to-income ratio calculator to compare your monthly income to your monthly payments. When your debt-to-income ratio is low, you can easily pay your bills and reach your financial goals. But when your debt-to-income ratio is too high, you are spending more than you can afford.
A low debt-to-income ratio indicates that you have a good balance between debt and income. As you might guess, lenders like this number to be low – you generally want to keep it below 35%, but the lower it is, the more likely you are to get the loan or credit you are looking for. Note that a high debt-to-income ratio has a negative impact on your credit score, has a negative impact on your credit score, even if minimum payments on accounts are made each month.
If you have a debt ratio above 35%, do not delay! There are quick and easy solutions to improve your debt ratio. Make an appointment today with one of our advisors.
- 30% or less: excellent
- Between 30% and 35%: good/fair
- 35% or more: actions need to be taken
The calculation of the debt ratio is a quick evaluation of your situation and does not take into account many complexities and your particular situation. An insolvency advisor’s evaluation is recommended to obtain a more accurate picture of your situation.