Debt-to-income ratio (DTI) explained

Debt-to-income ratio, often called DTI, is one of the most important factors lenders use to assess borrowing risk. It helps answer a simple question: how much of your income is already committed to debt?

This page explains what DTI is, why it matters, and how it affects loan eligibility — without credit checks or financial advice.

What is debt-to-income ratio?

Debt-to-income ratio compares your total monthly debt payments to your gross monthly income. It’s usually expressed as a percentage.

For example, if a portion of your income is already used to repay loans, credit cards, or other obligations, lenders may see higher risk in adding more debt.

Why lenders care about DTI

DTI helps lenders estimate affordability. Even borrowers with strong credit scores can face challenges if too much of their income is already allocated to existing debt.

A lower DTI generally indicates more financial flexibility, while a higher DTI can signal increased risk — especially during economic or personal changes.

Common DTI ranges

While exact thresholds vary by lender and loan type, DTI is often reviewed in broad ranges rather than exact numbers.

• Low DTI: Debt obligations take up a smaller portion of income
• Moderate DTI: Debt is manageable but may limit flexibility
• High DTI: A large share of income is already committed

Higher DTI does not automatically mean rejection, but it can affect approval odds, interest rates, or loan conditions.

DTI is only part of the picture

Debt-to-income ratio is rarely evaluated on its own. Lenders usually review it alongside credit score ranges, income stability, loan type, and timing.

This is why two borrowers with similar DTI values can receive very different outcomes depending on their overall financial profile.

BorrowCheck does not calculate lender-specific DTI thresholds. This page is informational and does not constitute financial advice.