Debt to Income Ratio

Your debt to income ratio is the percentage of your monthly income that goes towards paying your debts. For example, if your monthly income is $5,000, and you spend $2,000 per month on credit repayments, your debt to income ratio is 40%. Lenders may prefer applicants with a lower debt to income ratio as it can reflect a lower credit utilisation rate and a belief the applicant is more financially responsible.