Debt-to-Income Ratio for Student Loan Refinance: What to Know About DTI [With Calculator]

Your debt-to-income ratio (DTI)—your monthly debt payments divided by your gross monthly income—is a crucial factor lenders consider when reviewing your application for student loan refinancing.

Most lenders prefer a DTI under 50%, but your odds improve below 40% or even 35%. A high DTI could lead to higher interest rates or denial, unless you apply with a cosigner or take steps to improve your credit profile first.

Table of Contents

1. Why DTI matters for student loan refinancing
2. What DTI do you need to refinance?
3. How to calculate your DTI
4. Tips to refinance with a high DTI
5. DTI requirements by lender

Why DTI matters for student loan refinancing

When you apply to refinance student loans, private lenders assess your credit score, income, and DTI to determine eligibility and rates. DTI shows how much of your income is already committed to other debts and whether you can reasonably take on new payments.

Here’s how DTI can influence your refinance:

• Approval chances: Most lenders prefer DTIs below 50%, but approval odds improve under 40%, and the best rates are often reserved for those under 35%.
• Rates offered: Higher DTI means more risk to lenders, which may translate into a higher interest rate.
• Repayment terms: Your DTI can limit your repayment options. A lower DTI may qualify you for longer terms or lower monthly payments.
• Cosigner requirement: A high DTI might mean you need a cosigner to qualify or get better terms.

What DTI do you need to refinance?

Lenders rarely publish exact DTI limits, but here are general rules of thumb:

• Ideal: Below 35%
• Acceptable: Below 50%
• Risky: Above 50% (may require a cosigner or credit improvement)

Many lenders offer soft credit checks for prequalification. This won’t hurt your credit and can help you see your refinance options before applying.

I prefer DTI to stay under 35%. Beyond that, your quality of life suffers; you’ll have less money for the things you enjoy.

How to calculate your DTI

You can use this calculator to easily calculate your DTI—or follow the formula below.

1. Use our calculator:

2. Use this formula:

Monthly debt payments / Gross monthly income = DTI

Include minimum payments for:

• Credit cards
• Student loans
• Car loans
• Mortgage or rent
• Personal loans

Example:

If you pay $2,000 in debt monthly and earn $5,000 gross income:

2,000 / 5,000 = 40% DTI

Tips to refinance with a high DTI

If your DTI is above 50%, try these strategies:

1. Apply with a cosigner

Lenders may approve your application or offer better rates if a creditworthy cosigner shares responsibility for the loan.

2. Pay off small balances

Eliminating a low-balance credit card or loan reduces your monthly debt total, which lowers your DTI. Request payoff confirmation in writing to share with the lender.

3. Improve your credit profile

If your DTI is borderline, boosting your credit score can help offset the risk. Pay on time, reduce credit usage, and dispute any errors on your credit report.

DTI requirements by lender

Lender	DTI guideline (estimated)	Allows cosigner?	Prequalification?
SoFi	Up to 50%	Yes	Yes
Earnest	Up to 50% (prefers <40%)	No	Yes
Credible	Varies by partner lender	Varies by partner lender	Yes
ELFI	Case by case	Yes	Yes

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