This Debt Income (DTI) Ratio Calculator is meticulously designed to provide a detailed assessment of your financial health by calculating the percentage of income that goes towards servicing debt. It incorporates various income sources and debt categories, making it suitable for individuals with diverse financial profiles.
The income and debt fields in this Debt-to-Income (DTI) Ratio Calculator could represent monthly or yearly values, but this choice must remain consistent across all inputs.
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\( M = P \cdot \frac{(1 + r)^n - 1}{r \cdot (1 + r)^n} \)
Where: M: Monthly payment P: Principal loan amount r: Monthly interest rate (annual rate divided by 12) n: Total number of payments (loan term in months)
\( \text{DTI Ratio} = \left( \frac{\text{Monthly Debt Payments}}{\text{Monthly Income}} \right) \cdot 100 \)
Where: Monthly Debt Payments: Total of all monthly debt obligations (e.g., loans, credit cards, etc.) Monthly Income: Total gross income per month
Using this calculator helps you maintain a clear perspective on your financial commitments and plan better for future investments or debt management.