Calculation of debt ratio

The debt ratio corresponds to the share that the expenses of a household represent in relation to its income. In order to know yours, we offer you this calculator , which will give you with precision your debt ratio .

Fixed monthly income of your household
€ / month Enter your net monthly salary
€ / month Enter your other fixed income such as rental income, alimony, allowances, etc ... (0 if necessary)
€ / month
€ / month
Fixed monthly charges for your household
€ / month Enter the amount of your rent excluding APL or the amount of your mortgage. If you no longer repay your mortgage or you are lodged, put 0.
€ / month Monthly repayment credit (s) (0 if necessary)
€ / month Alimony or other recurring charges (0 if necessary)

What is the debt ratio used for?

It is the index allowing to evaluate the repayment capacities of a person or a household. This index therefore corresponds to the share of your expenses in relation to your income. Usually in United States, banking organizations recommend having a debt ratio lower than 1/3 of its income, the famous 33%.
The debt ratio also makes it possible to know its repayment capacities. Indeed, for any new loan, it will be difficult for you to obtain monthly payments making you exceed 33% of debt. The maximum reimbursable monthly payment will therefore be calculated.

Algorithm

To obtain its debt ratio, the calculation method is very simple. All you have to do is add up your fixed costs and divide them by your total income. Multiply the result by 100 and you will get your percentage debt ratio.

What limits to the debt ratio?

Depending on income, the "tolerated" debt ratio can be raised to 35% or even more. The impact on the remaining living of a household will indeed be less important, if the latter's income is higher.
When a person sees his debt ratio exceed 75%, we can clearly speak of over-indebtedness.
You should not wait to be over-indebted to clean up your budget, it is with this in mind that the repurchase of credits was created. The operation consisting in reducing your monthly repayment installments, if they decrease, your debt ratio does the same.