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Your Debt-to-Income Ratio Shows When Debt Is Getting Out of Control

Managing Debt

Being in debt is stressful and trying to handle your debt problems on your own is no walk in the park either. But having a credit counselling service to help you sort out your debt problems can make the journey easier. A trained credit counsellor works with you to develop a plan to pay off your debt as quickly as possible. A credit counsellor can negotiate with your lenders to reduce your monthly payments, cut your interest rates, waive penalties and minimize damage to your credit. Your financial goals may seem far away or unreachable but with the right help on your side you can get to where you need to be.

One of the fundamentals of good financial health is keeping your debt at a manageable level. This section will provide you with the steps to calculate your DTI. If your calculations reveal that you are carrying too much debt, we can help you find the right debt solution. Call Consolidated Credit today at 1-888-287-8506 for a free debt evaluation with a trained credit counsellor or take the first step online now by completing a request for Free Debt Analysis.

What Does Debt-to-Income Ratio Mean?

Your debt-to-income (DTI) ratio is precisely what it sounds like – the total amount of debt you have compared to your total income. It is a comparison of your monthly debt expenses to the amount of money you bring home at the end of the month. A calculation of your DTI is an easy and effective way of seeing if you have a healthy amount of debt or if you have more debt than you should, given your income level.

A high debt load is often accompanied by a slew of financial problems, unhealthy patterns and habits. Meeting your financial obligations like bill payments becomes nearly impossible and sticking to your budget goes haywire. Saving turns into a thing of the past as you have no money left over to put away. Your reliance on credit to get by increases significantly, sending you deeper and deeper into debt.

But, if you calculate your household DTI on a regular basis, these warning signs will be detected early, affording you the knowledge and power to address it before it becomes too big to handle on your own. What’s more, if you plan on making a big purchase that requires a loan, lenders scrutinize your DTI to determine how much debt you the customer can handle before financial difficulty rears its head. They then use this information to set the amount they lend you. If you want to measure how much debt you are carrying, use this metric to find out.

Debt-to-Income Ratio Calculator

Here at Consolidated Credit we care about your finances and your overall financial health. For this reason we have provided for you a free online debt-to-income ratio calculator to easily calculate your DTI ratio as often as you need. In doing so your financial path will always be in focus and you can try to stay on the right financial path. It will also tell whether you need to develop a debt reducing strategy to stay afloat.

Calculate your household debt-to-income ratio

 

Using Your DTI Ratio to Determine If You Need Debt Help

Your DTI helps you ascertain whether you can address your debt woes solo or whether you need the help of a trained financial professional. A trained credit counsellor will help you find the right debt solution to fit your unique financial circumstance. Knowing your ratio gives you the opportunity to improve it, which will increase your chances of getting a better mortgage, a better car loan and even better credit card rates.

Do you need to seek debt help?

 

How Canadians Spend Their Money

If you’ve been wondering how your neighbours spend their money and on what, this section will shed some light. In this segment you will find an overview of how the average Canadian family divides their family income between paying down debt, savings and recurring monthly financial obligations. You can also measure your family’s spending against national household averages in Canada to find out whether you are on the right financial track.

Related topics:

Is your spending in balance?

 

We're Here to Help

So, if your debt-to-income ratio calculations reveal that you are heavily indebted, it’s time to enlist the help of a financial professional to help you find a real solution to get back on track. Take action now by calling Consolidated Credit at 1-888-287-8506 to speak with a trained credit counsellor about your options for debt relief. You can also take the first step online by completing a request for a Free Debt Analysis.

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Coping with Financial Stress

If you're under financial stress, you may be arguing with your spouse or family members about money, experiencing headaches or panic attacks, hiding bills or receipts from family members, or finding it difficult to sleep at night. Your eating habits may have gone south, and you may find it hard to make it through the day. Use this guide to help you deal with your stress.

We are a proud member of the Canadian Association of Credit Counselling Services (CACCS), the national voice for not-for-profit credit counselling services. As a CACCS member, you can trust that our trained credit counsellors strive to provide the best in professional, independent and unbiased personal finance services. We’ve helped hundreds of thousands of Canadians find relief from debt. Call us today to find out if we can help you.

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