How lenders use debt-to-income
Your debt-to-income ratio is your monthly debt payments divided by your gross monthly income, before taxes. Lenders use it to judge whether you can take on another payment. A new loan's payment adds to your debts, so the room under a lender's limit sets how big a payment, and so how big a loan, you can get.
There's no federal DTI limit for personal loans. Around 36% is a common guide, and lenders' own maximums range from about 40% to over 50%. Mortgages are different: 43% was the long-standing qualified-mortgage benchmark.
How the amount is worked out
Most you could pay each month = gross monthly income × maximum DTI − existing monthly debt payments. The loan is the amount that payment repays over the term at the note rate, charged monthly at one twelfth of the yearly rate.
Worked example
You earn $6,000 a month before tax and pay $900 a month on rent, a car loan and card minimums, so your DTI is 15% now. At a 36% limit, your debts can reach $2,160 a month, leaving $1,260 for a new loan. At 11% over 4 years, $1,260 a month repays $48,751.19.
What counts as debt
Lenders usually count rent or mortgage payments, auto loans, student loans, other personal loans, child support and minimum credit card payments. Utilities, groceries, insurance and phone bills usually don't count. Some lenders leave out housing costs, so check how your lender measures it.
Your credit score, income stability and the lender's maximum loan size matter too, so the loan you're offered can be smaller than this estimate.
To check the payment and APR on a specific offer, use the US loan payment calculator .
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK lenders assess affordability from take-home pay and essential spending, and quote an APR as an effective annual rate. Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For a UK loan, use the UK loan eligibility calculator in pounds.
Inputs for the US loan qualification calculator
Gross monthly income
Your income before taxes and deductions. For a yearly salary, divide by 12.
Monthly debt payments
Rent or mortgage, car, student and personal loan payments, child support and credit card minimums. Leave out a debt this loan will pay off.
Maximum debt-to-income ratio
The highest DTI the lender accepts, including the new loan. 36% is a common guide; check the lender's own limit.
Interest rate
The yearly note rate you expect to be offered. The rate shown is only an example.
Term
How many years you'd repay over. A longer term lets the same payment cover a bigger loan, at a higher total cost.
CALCULATOR QUESTIONS
US loan qualification calculator questions
What DTI do I need for a personal loan?
Many lenders prefer under 36%, and some accept 50% or more. There's no federal limit for personal loans, so each lender sets its own.
How do I calculate my debt-to-income ratio?
Add up your monthly debt payments and divide by your gross monthly income. $900 of debts on $6,000 of income is a 15% DTI.
Does my credit score matter as well?
Yes. Your score affects whether you're approved and the rate you get, and a higher rate means your payment covers a smaller loan.
Does this check affect my credit?
No. The calculator doesn't check your credit. Prequalifying with a lender usually uses a soft inquiry; a full application uses a hard inquiry.