(DTI) Debt-to-Income Ratio Calculator

Your debt-to-income ratio is an important factor when applying for a car refinance loan.

(DTI) Debt-to-Income Ratio Calculator

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What is a Debt-to-Income Ratio?

The debt-to-income ratio, also known as DTI, is a measurement of your monthly debt obligations compared to your gross monthly income.

A higher DTI means more of your income is going toward paying monthly debt.

How to Calculate Your Debt-to-Income Ratio

First, you’ll need to know the amount of your monthly debt payments and add them up. This includes:

  • Mortgage or rent
  • Alimony or child support
  • Car loan payments
  • Personal loans
  • Credit cards
  • Student loans

Then, divide the sum of your monthly payments by your gross monthly income to get your DTI.

What’s a Good DTI for a Car Refinance Loan?

While mortgage lenders prefer a debt-to-income ratio below 36%, many auto refinance lenders have a maximum of 50% — others don’t have a maximum at all.

A good rule of thumb is to keep your DTI below 50% to increase your odds of getting approved for a car refinance loan. However, there are other factors that lenders consider, like your credit score, loan-to-value (LTV), vehicle age, and more.

Read more: How to Refinance Your Car Loan: The Ultimate Guide

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