How to Calculate Your Debt-to-Income Ratio in Louisiana
Your Debt-to-Income ratio is just one factor that lenders may use when they consider whether they’d like to provide you a loan. It’s a useful tool to get an idea where you stand financially, and calculating your ration is relatively simple.
First, Calculate Your Monthly Expenses & Debts
To start calculating your debt-income ratio, you need to include your total monthly debts. These may include:
- House payments or rent
- Credit card debt
- Alimony or child support payments
- Loans (education, car, etc)
- Other debts
For this calculation, you do not need to include monthly expenses like groceries, utilities, or taxes.
Next, Calculate Your Monthly Income
You will need to find your gross monthly income before tax deductions, retirement savings, and other items.
Complete Your Calculation
Once you have your total monthly debt, you will divide it by your gross monthly income to find your debt-to-income ratio.
Example: If your gross monthly income is $5,000 and your monthly debts total $1,250, your debt-to-income ratio would be:
$1,250 ÷ $5,000 = 25%
A 25% ratio is typically considered healthy. Higher ratios may suggest financial strain and could affect your ability to qualify for loans or affordable credit.
Start Your Calculations
Input your debt and income totals in the boxes below, hit complete, and see your ratio.
Debt-to-Income Ratios and Bankruptcy in Louisiana: FAQs
What does a Debt-to-Income Ratio represent?
A debt-to-income ratio is a tool that allows lenders to evaluate your ability to manage the monthly payments that you currently owe and how those obligations may change if they grant you a loan. They are checking to see if you can repay borrowed money.
What is a good Debt-to-Income ratio?
Typically, the lower your debt-to-income ratio, the better. A low score means you have created a good balance between your monthly incomes and debts. Each lender may have a different standard for a preferable ratio, but many prefer rates below 35-36%. You should discuss your ratio with a bankruptcy attorney to get a full understanding of what your score means and ensure it is correct.
Can I lower my debt-to-income ratio?
It is possible to lower your debt-to-income ratio using small or major changes. Some simple tips include budgeting for your current income level and considering your monthly expenses outside of the calculated debt. Avoid taking on more debt.
Speak With a Louisiana Bankruptcy Attorney Today
Our bankruptcy attorneys are here to help you consolidate your debt and seek a solution to a high debt-to-income ratio. We understand that a high ratio makes it harder for you to seek loans and other opportunities, and we’re ready to help.
Calculated a high DTI ratio? Here’s what to do next:
1. Don’t panic – you have options
2. Gather your financial documents
3. Schedule your free consultation
4. Get a personalized debt relief plan
Remember: The sooner you act, the more options you’ll have available. Our bankruptcy attorneys help Louisianans analyze their debt-to-income ratio, understand credit impacts, and explore debt relief options that fit their situation.
Call us now to schedule your free consultation:
- Shreveport / Monroe – (318) 868-2600
- Alexandria – (318) 625-7505
- Lafayette / Lake Charles – (337) 984-1584
Or Schedule Your Free Consultation Online. We’re here to guide you — not judge you.
Disclaimer
This calculator is for educational use only and does not replace financial or legal advice. Your actual debt-to-income ratio may vary depending on reporting agencies and unique financial factors. For personalized guidance, speak with a bankruptcy attorney licensed in Louisiana.
