What Is a Debt-to-Income Ratio?
Your debt-to-income ratio โ also called DTI, FOIR, or debt burden ratio depending on your country โ is a simple percentage that shows how much of your monthly income goes toward paying debts. It is one of the most important numbers lenders look at when you apply for a loan, mortgage, or credit card.
The formula is straightforward: divide your total monthly debt payments by your gross monthly income and multiply by 100. If you earn 250,000 per month and pay 70,000 in debt payments, your DTI is 28%. That means 28 of every 100 you earn goes toward debt โ leaving 72 for living expenses, savings, and everything else.
Why This Calculator Is Different
Every other DTI calculator online is built for US mortgage applicants. They assume you have a formal salary, credit card debt, and a student loan. They do not account for weekly microfinance repayments, savings groups (ajo, paluwagan, chit fund), informal family loans, or daily earnings from gig work. This calculator was built for the real world โ including the the majority of working people worldwide whose financial lives look nothing like a US mortgage application.
What Counts as Debt?
Include in your debt total: All formal loan repayments (bank loans, microfinance EMIs, vehicle loans, personal loans), credit card minimum payments, and any regular repayments to informal lenders or family members.
Do not include: Groceries, utilities, phone bills, transport, insurance premiums, school fees, or general living expenses. These are expenses, not debts.
In some regions, informal obligations may be known as chit funds, paluwagan, 5-6 lending, ajo, tontine, or savings and credit associations. These are valid financial obligations and should be included when calculating your real-life DTI โ though they may not appear in official lender credit checks.
Frequently Asked Questions
What is a good debt-to-income ratio?
Many lenders use 36% as a general guideline, with anything below considered manageable. However this varies significantly by country, lender, and loan type. Indian lenders may accept FOIR up to 50โ55%. UAE Central Bank caps DBR at 50%. Nigerian CBN guidance implies 33%. Always check with your specific lender.
Should I use gross or net income?
Use gross income โ your income before taxes and deductions. This is the standard used by most lenders globally. If you only know your net (take-home) pay, you can use that, but your calculated DTI may appear slightly higher than what a lender would calculate.
What if I earn daily or weekly?
Use the frequency buttons to enter your actual daily or weekly earnings. If you choose Daily, you can also change the number of working days to match your situation. We convert everything to a monthly amount for you.
What is FOIR and how is it different from DTI?
FOIR (Fixed Obligation to Income Ratio) is the Indian term for the same concept as DTI. The formula is identical โ monthly fixed obligations divided by gross monthly income. Similarly, DBR (Debt Burden Ratio) is used in the UAE and Middle East. All three measure the same thing.
Does DTI affect my credit score?
DTI itself is not part of your credit score calculation. However, the debts that make up your DTI โ especially credit card balances โ do affect your credit utilization ratio, which is a major credit score factor.
How can I lower my DTI?
There are two paths: increase your income or reduce your monthly debt payments. Paying off the smallest debt entirely removes that monthly payment from your DTI immediately. Refinancing to lower monthly payments also helps. Even a small income increase can meaningfully lower your ratio.
Is my financial data stored anywhere?
No. All calculations happen entirely on your device. Your income and debt numbers are never sent to us and remain completely private.