Enter the total monthly debt ($) and gross income ($) into the Calculator. The calculator will evaluate the Total Debt Servicing Ratio.
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Total Debt Servicing Ratio Formula
TDSR = D / GI * 100
Variables:
- TDSR is the Total Debt Servicing Ratio (%)
- D is the total monthly debt ($)
- GI is the total gross income ($)
To calculate Total Debt Servicing Ratio, divide the monthly debt by the monthly gross income, then multiply by 100.
How to Calculate Total Debt Servicing Ratio?
The following steps outline how to calculate the Total Debt Servicing Ratio.
- First, determine the total monthly debt ($).
- Next, determine the total gross income ($).
- Next, gather the formula from above = TDSR = D / GI * 100.
- Finally, calculate the Total Debt Servicing Ratio.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
total monthly debt ($) = 500
total gross income ($) = 1000
Frequently Asked Questions
What factors can affect my Total Debt Servicing Ratio (TDSR)?
Changes in your monthly debt, variations in your gross income, or taking on new loans can affect your TDSR.
How can I improve my Total Debt Servicing Ratio?
Improving your TDSR can involve increasing your gross income, reducing your monthly debts, or a combination of both.
Why is the Total Debt Servicing Ratio important for lenders?
Lenders use TDSR to assess a borrower’s ability to manage monthly payments and determine their risk level.
Can the Total Debt Servicing Ratio affect my ability to get a loan?
Yes, a high TDSR might limit your loan options or affect the interest rates lenders offer you.
