Debt Ratio

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, 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.