Carrying Several Loans? Check Your Combined DTI First
Debt-to-Income ratio (DTI) measures how much of your annual income goes toward paying off all your debts combined. A single personal loan might look manageable on its own, but once you add up a personal line of credit, credit card minimum payments, and a mortgage or auto loan, the total can push past the 36% guideline that many conventional lenders use, or even the 43% cap that applies to most Qualified Mortgages. A personal line of credit deserves extra attention here, since lenders often calculate a payment based on your full credit limit rather than just what you've actually drawn, so a large unused line can inflate your DTI more than expected. This calculator lets you enter each type of debt separately and shows your combined DTI along with how much room you have left under the 36% benchmark. Short-term debts like personal loans and credit cards tend to carry disproportionately high annual payments relative to their balance, so if you're planning to take on new debt, it's worth reviewing the payoff timeline of your existing loans as well, not just the new one.
How It's Calculated
| Item | Formula |
|---|---|
| Total Annual Debt Payments | Sum of all loans' annual payments |
| Combined DTI | Total Annual Debt Payments รท Annual Income ร 100 |
| Remaining Room | (Annual Income ร 36%) - Total Annual Debt Payments |
Frequently Asked Questions
Many conventional lenders prefer 36% or lower, and most Qualified Mortgages cap it at 43%, though limits vary by lender.
Lenders often estimate a payment based on your credit limit rather than just what you've drawn, so it can raise your DTI more than expected.
New loan approval becomes harder, but exceptions can apply depending on the lender and compensating factors, so confirm with individual lenders.
โป Actual DTI calculation methods vary by lender and loan type, so treat this as a rough estimate.