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How To Calculate Your Debt To Income Ratio

From LaToya Irby,
Your Guide to Credit / Debt Management.
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Calculate Your Debt To Income Ratio

Once you've calculated what you spend each month on debt payments and what you receive each month in income, you have what you need to calculate your debt-to-income ratio. To calculate the ratio, divide your monthly debt payments by your monthly income. Then, multiply the result by 100 to come up with a percent.

Example

In our example, Sam's monthly debt payments total $1,540 and his monthly income total $4,000. So, let's divide $1,540 by $4,000 and then multiply by 100.

$1540 / $4000 = .385 X 100 = 38.5%

Sam's debt to income ratio is 38.5%.
  1. Introduction: Calculating Your Debt To Income Ratio
  2. Total Your Monthly Debt
  3. Total Your Monthly Income
  4. Calculate Your Debt To Income Ratio
  5. What Your Debt To Income Ratio Means

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