Fnb Personal Loan Interest Rate Calculator

by

Debt-to-Income (DTI) Ratio Calculator

Monthly Debt Payments

Results:

Total Monthly Debt: $0.00

Your Debt-to-Income Ratio is: 0.00%

function calculateDTI() { // Get Input Values using var, ensure they are numbers based on specific topic IDs var grossIncome = parseFloat(document.getElementById("grossMonthlyIncome").value) || 0; var mortgageRent = parseFloat(document.getElementById("monthlyMortgageRent").value) || 0; var carPayment = parseFloat(document.getElementById("monthlyCarPayment").value) || 0; var studentLoans = parseFloat(document.getElementById("monthlyStudentLoans").value) || 0; var creditCards = parseFloat(document.getElementById("monthlyCreditCards").value) || 0; var otherDebt = parseFloat(document.getElementById("monthlyOtherDebt").value) || 0; var resultContainer = document.getElementById("dtiResultContainer"); var interpretationBox = document.getElementById("dtiInterpretation"); // Input Validation Logic if (grossIncome <= 0) { resultContainer.style.display = "block"; document.getElementById("totalDebtResult").innerText = "0.00"; document.getElementById("dtiPercentageResult").innerText = "0.00"; interpretationBox.style.backgroundColor = "#ffecec"; interpretationBox.style.color = "#d63638"; interpretationBox.innerText = "Please enter a Gross Monthly Income greater than zero to calculate your ratio."; return; } // Calculate Total Monthly Debt based on topic inputs var totalMonthlyDebt = mortgageRent + carPayment + studentLoans + creditCards + otherDebt; // Calculate DTI Formula based on topic math var dtiRatio = (totalMonthlyDebt / grossIncome) * 100; // Update Result Display resultContainer.style.display = "block"; document.getElementById("totalDebtResult").innerText = totalMonthlyDebt.toFixed(2); document.getElementById("dtiPercentageResult").innerText = dtiRatio.toFixed(2); // Determine status message based on standard DTI thresholds var statusMessage = ""; var bgColor = ""; var textColor = ""; if (dtiRatio = 36 && dtiRatio <= 43) { statusMessage = "Manageable range. You may still qualify for loans, but lenders will scrutinize your application closely."; bgColor = "#fff3cd"; textColor = "#856404"; } else { statusMessage = "High risk range. Many lenders, particularly for qualified mortgages, set a limit around 43%. You may face difficulty securing new credit."; bgColor = "#f8d7da"; textColor = "#721c24"; } interpretationBox.style.backgroundColor = bgColor; interpretationBox.style.color = textColor; interpretationBox.innerText = statusMessage; }

Understanding Your Debt-to-Income (DTI) Ratio

Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to assess your financial health and ability to repay borrowed money. Unlike your credit score, which measures your credit history, DTI measures your current capacity to take on new debt by comparing your monthly debt obligations to your gross monthly income.

Why DTI Matters for Borrowing

Whether you are applying for a mortgage, an auto loan, or a personal line of credit, the lender wants reassurance that you aren't overextended. A lower DTI generally signals to lenders that you have sufficient disposable income to comfortably handle a new monthly payment, making you a lower-risk borrower. Conversely, a high DTI suggests that a significant portion of your income is already spoken for, increasing the risk of default.

For example, if you earn $6,000 a month (gross) and your total monthly debt payments (rent, car note, credit card minimums) equal $2,400, your DTI is 40%. Lenders use this specific percentage to define loan terms and eligibility.

Interpreting Your DTI Score

While different lenders have varying criteria depending on the loan type, there are general benchmarks used in the financial industry:

  • 35% or Less (Good): This is considered healthy. You likely have manageable debt relative to your income, and lenders will view you as a strong candidate for competitive interest rates.
  • 36% to 43% (Manageable but elevated): You are still in a borrowable range, but you are approaching the upper limits for many conventional loans. For Qualified Mortgages, 43% is often the highest ratio allowed without compensating factors.
  • Above 43% (High Risk): At this level, you may find it difficult to get approved for a mortgage or other significant loans. Lenders may view your financial situation as precarious, fearing that any unexpected expense could cause you to miss payments.

What's Included in the Calculation?

It is vital to use the correct numbers for an accurate DTI calculation. The calculator above focuses on your back-end DTI, which is the most comprehensive view.

  • Gross Income: Your total income before taxes and other deductions.
  • Debt Obligations: This includes housing costs (rent/mortgage principal, interest, taxes, insurance), car payments, student loans, child support/alimony, and crucially, the minimum monthly payments on credit cards—not the total balance.

Using this calculator can help you understand where you stand today so you can take steps to improve your financial footing before applying for new credit.

Leave a Comment