Monthly Debt-To-Income Ratio and Debt Management Plans
This is a good time to talk about your Monthly Debt-To-Income Ratio. Your lenders will use your monthly debt to income ratio to determine your ability to repay the money monthly that you have borrowed. Higher DTI means you’ll pay more interest, or you may be denied a loan.
Lenders use various calculators, some more complicated than others. However, DTI is simply the percentage of your gross monthly income (before taxes) that goes towards payments for rent, mortgage, credit cards, or other debt.
Here are several ‘commercial free’ Debt Management tools and strategies that empower you to manage your personal debt.
What is the Debt-To-Income Ratio and why does it matter? Get Answers Here
Why is the 43% debt-to-income ratio important? Get Answers Here
Figure out your debt-to-income ratio to see how much of your income goes toward paying debt each month. Use the CFPB Debt-to-Income Calculator
Debt Management Plans
For those with considerable debt problems, a financial counseling session is an effective first step to help you manage your finances better. In some cases, and if appropriate, entering a Debt Management Plan (DMP) can start you on the road to a financially stable, debt-free life.