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What Are Debt Ratios?

Your debt-to-income ratio can be defined as the percentage of your gross monthly income that is used to pay outstanding debt. The debt-to-income ratio is an important factor that is taken into consideration when determining the loan amount that we believe you can repay.

To calculate your debt-to-income ratio, you will need to determine your gross monthly household income. That includes the total income from adult wage earners, plus any additional verifiable income such as regular dividend payments.

Next, you will need to add together all of your monthly debt payments. This includes your rent or mortgage payment, outstanding installment loan and line of credit payments, as well as bank and store credit card bills.

Once you have the total of your monthly debt payments and your gross monthly income, simply divide the former by the latter. You can try to calculate your debt-to-income ratio following the example below. Remember, this is just a tool to give you an idea of your debt ratio. Lenders will take a thorough look at your financial situation when you apply for a loan.

If you have any questions, please speak to a Dollar Bank representative. 

Example
Rent or Mortgage Payment $350 $________
Auto Loan Payment(s) $250 $________
Personal Loan Payment(s) $100 $________
Education Loan Payment(s) $0 $________
Line of Credit Payment(s) $50 $________
Bank Credit Card Payment(s) $35 $________
Store Credit Card Payment(s) $75 $________
Other Monthly Debt(s)   + $40 $________
Total Monthly Debt Payments $900 $________
Gross Monthly Income ÷ $3,000 $________
Debt-to-Income Ratio = 30%   ________%


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