How to calculate debt-to-income ratio

Debt-to-income ratio = monthly debt payments ÷ gross monthly income × 100. The result is shown as a percentage, along with the remaining income — your gross income minus the payments. A quick example: 400 dinars of payments on 2,000 dinars of income gives a ratio of 20% and 1,600 dinars of remaining income.

Enter your total monthly obligations: loan installments, credit lines, minimum card payments, and any required monthly repayment. Do not enter living costs such as rent, food and bills — the ratio covers debt only. Make sure to include the minimum card payments even if small, since the common oversight of omitting them hides the real pressure on your income.

The ratio divides by gross income before taxes and deductions, which is what lenders usually use. Using net income after deductions inflates the ratio and makes it incomparable with their benchmarks. If your income fluctuates, use an estimated monthly average for the recent period.

A common guideline is a ratio below 36% of gross income, with higher values indicating high debt pressure that leaves less room for a new loan. Lenders prefer lower ratios that allow more flexibility. The ratio is one indicator, not the full verdict: lenders also weigh your credit history and income stability.

The result shows the debt-to-income ratio as a percentage and the remaining income after payments. Common mistakes: using net income instead of gross, forgetting minimum card payments, entering living costs among the payments, and entering zero income. The calculator requires income greater than zero, since the ratio cannot be computed without it.

Use it before applying for any new loan or financing to know your current ratio, and to estimate the effect of a new loan on your debt pressure. Re-run the calculation with the proposed loan payment added to see the ratio after the commitment. A good ratio does not guarantee approval, but it sets expectations and prepares you for the conversation with the lender.