Calculate Your Own Payment-to-Income (PTI) Ratio
This calculator can help you estimate your PTI ratio based on your income and auto loan debts. Input your current gross monthly income and your anticipated or current car loan payment. You’ll be able to see your current PTI ratio as well as the recommended maximum range for your car loan payment based on your income.
Use your gross monthly income (before taxes)
Use your current or estimated car payment.
This calculator is for estimating purposes only. We cannot guarantee your lender-calculated payment-to-income ratio or how it will impact your ability to be approved for financing.
What is Payment-to-Income (PTI) Ratio?
Payment-to-Income (PTI) ratio is an important indicator used by lenders to assess the financial health of a consumer before granting them a loan. It is calculated by dividing your monthly car loan payment by your monthly income.
A higher PTI ratio indicates that the consumer has less money left over after making payments, while a lower PTI ratio indicates that the consumer has some reserves in their budget and denotes responsible borrowing behavior, which can help increase the chances of getting approved for loans in the future.
Payment-to-Income (PTI) Ratio Formula
PTI is calculated by dividing an individual's total recurring payments, such as car loan payments, by their total monthly income.
Monthly Auto Loan Payment ÷ Gross Monthly Income = PTI
What is a Good Payment-to-Income Ratio for a Car Loan?
Although lenders typically set their own thresholds regarding acceptable levels of payment-to-income ratios, it is generally advisable from a financial standpoint to shoot for no more than 10-15% of your income to go towards a car loan.
Making sure that you spend within your budget is the best way to maintain a good PTI ratio. Even if you can't get your dream car now, you may be able to finance something more affordable while you build up your income and credit to better position you for that dream car purchase down the road.
Lenders may also choose to look more broadly at your overall debt-to-income (DTI) ratio, to consider more debts than simply the car loan.
Payment-to-Income Frequently Asked Questions (FAQs)
What is Payment-to-Income (DTI) Ratio?
Payment-to-Income (PTI) ratio is an important indicator used by lenders to assess the financial health of a consumer before granting them a loan. It is calculated by dividing your monthly car loan payment by your monthly income.
How Is Payment-to-Income Ratio Calculated?
PTI is calculated by dividing an individual's total recurring payments, such as car loan payments, by their total monthly income. Monthly Auto Loan Payment ÷ Gross Monthly Income = PTI
What is an Acceptable Payment-to-Income Ratio for a Car Loan?
Keeping car loans within 10-15% of your total income is typically advised, although lenders will likely set their own standards for financing.