Divide your monthly debt payments by your gross income to find your DTI.
Debt-to-income ratio
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Rating
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Income free of debt
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Your breakdown
Updates live as you type| Step | Figure |
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What the ratio actually measures
Your debt-to-income ratio compresses two numbers, what you owe each month and what you earn each month, into a single percentage that lenders read in seconds. The smaller the number, the more of your salary is genuinely yours to spend and save after the loans are serviced. This calculator takes your total monthly debt repayments and divides them by your gross monthly income, then tells you which side of the line you fall on. Gross means before PAYE and pension deductions, because that is the figure most Nigerian banks and microfinance lenders assess against when they size a facility.
Include every recurring repayment in the debt box: a car loan, a personal loan from your bank, the monthly instalment on a phone or generator bought on credit, any cooperative or thrift contribution that is really a loan repayment, and the minimum due on a credit card. Leave out things that are not debt, like your rent, your electricity bill, school fees, or your data plan. Those matter for your budget, but they are not what a lender counts when working out a debt service ratio.
Reading the three bands
The cut-offs this calculator uses are common lending heuristics, not tax law, so there is nothing to verify with a revenue authority here. Under 36 percent is treated as healthy: you have clear room to take on a sensible new loan without straining the household. Between 36 and 43 percent is the caution zone, where you can usually still borrow but a careful lender will look hard at your other commitments. Above 43 percent is rated high, and many Nigerian banks will hesitate, ask for a guarantor, or decline a fresh facility outright. Different lenders draw the line in slightly different places, so treat these as a guide to how risky your file looks rather than a hard rule.
A salary of NGN 700,000 carrying NGN 200,000 of repayments
Take the default figures in the tool. You earn NGN 700,000 gross a month and your loan repayments add up to NGN 200,000. Divide one by the other and you get a ratio of 28.6 percent, which lands in the healthy band, and the income left free of debt is NGN 500,000. That headroom is what tells a lender you could absorb another modest instalment.
Pushing the number down
There are only two levers, and the ratio responds to both. You can shrink the top number by clearing a balance early, refinancing a costly loan onto a longer term to cut the monthly instalment, or consolidating several small debts into one cheaper payment. Or you can grow the bottom number with a raise, a side income, or a confirmed bonus. A practical tip: if you are about to apply for a mortgage or a car loan, pay down or close your smallest revolving balance first. It barely dents your total debt, but it removes a whole line item from your file and often nudges the ratio across a band boundary, which is what the lender's screen reacts to.
One common mistake is judging affordability on net pay while the lender judges it on gross. A ratio that feels comfortable against your take-home can look tighter on the gross figure the bank actually uses, so run both before you assume you have room.
Does my mortgage count in the ratio?
If you already hold a mortgage or rent-to-own facility, yes, the monthly repayment belongs in the debt box. If you are calculating this to see how big a new mortgage you can carry, leave the future repayment out for now, find your current ratio, then use the headroom to estimate what instalment would still keep you inside the healthy band.
Why does the tool use gross income rather than my take-home?
Gross is the standard base for a debt service ratio because it is verifiable from a payslip or letter of employment and does not move with your personal deductions. Two people on the same gross salary can have different net pay depending on pension elections and reliefs, so lenders standardise on gross to compare applicants fairly.