Debt-to-Income Ratio: What It Is and How It Affects Your Loans

When lenders look at your finances, one of the first numbers they check is your debt-to-income ratio, a simple calculation that compares how much you owe each month to how much you earn. Also known as DTI, it’s not just a number—it’s a gatekeeper to mortgages, car loans, and even credit cards. If your DTI is too high, you might get denied—even if you have a great credit score.

Lenders use this ratio to guess if you can handle more debt without drowning. A DTI under 36% is considered healthy. Above 43%, and most banks won’t touch you with a ten-foot pole. That’s why people trying to buy a home or consolidate debt often scramble to lower it. They pay down credit cards, delay big purchases, or even take on a side job. It’s not glamorous, but it works. Your debt consolidation, a method of combining multiple debts into one monthly payment, can help lower your DTI—if you stop adding new debt. And your credit score, a separate but closely linked measure of your borrowing reliability won’t fix a bad DTI. You can have an 800 score and still get rejected because you’re already carrying too much debt relative to your income.

Many people think their credit score is the only thing that matters. It’s not. A high DTI can sink your loan application even if your score is perfect. That’s why the posts below cover real situations: how to pay off $30,000 in debt in a year, whether a loan can help you consolidate credit cards, and how to unlock home equity without refinancing—all of which tie back to managing your debt-to-income ratio. You’ll find no fluff here. Just clear, practical steps people have used to get their DTI under control and finally qualify for the loans they need.