How the check works
The payment uses the note rate divided by 12. Your DTI with the loan is your monthly debt payments plus the new payment, divided by your gross monthly income. If it's under the limit you set, the loan fits.
Worked example
A $15,000 loan at 11% for 4 years costs $387.68 a month. With $6,000 gross income and $900 of debt payments, your DTI would be 21.46%, leaving $872.32 a month of room under a 36% limit.
A $40,000 loan over 3 years would cost $1,309.55 a month and push your DTI to 36.83%, so you'd be $49.55 over the limit.
What DTI limit to use
The CFPB describes 36% as a common guide, with lenders' limits varying by loan type. A DTI that fits a lender's rules can still feel tight, so check your own budget too.
What this calculator assumes
A fixed note rate and equal monthly payments, with no fee added to the balance. Count only minimum payments on cards, and include rent or your mortgage payment.
How much could you qualify for?
This page checks one loan. To find the most a DTI limit would allow, work it the other way.
For your maximum loan, use the US loan qualification calculator .
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK lenders check affordability from take-home pay and spending rather than a DTI ratio. Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For a UK loan, use the UK loan affordability calculator in pounds.
Inputs for the US loan affordability calculator
Loan amount
The loan you're considering, in US dollars.
Interest rate
The yearly note rate from your offer.
Term
How long you'd take to repay, in years.
Gross monthly income
Your monthly income before tax and other deductions.
Monthly debt payments
Rent or mortgage, car, student loan and minimum card payments.
Maximum debt-to-income ratio
The limit to test against. 36% is a common guide.
CALCULATOR QUESTIONS
US loan affordability calculator questions
How do I know if I can afford a loan?
Add the new payment to your monthly debt payments and divide by your gross monthly income. If the result is under the lender's DTI limit, and your budget still works, it's likely affordable.
What is a good debt-to-income ratio?
Lower is better. The CFPB describes 36% as a common guide, though many lenders allow more on some loans.
Does DTI use gross or net income?
Gross: your income before taxes and deductions.
What counts as debt in DTI?
Recurring debt payments: housing, car loans, student loans, minimum card payments and the new loan. Utilities and groceries aren't counted.