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Cosigner Loan Affordability Calculator

Enter both parties' monthly income and debt plus the new payment to check combined DTI.

How it is calculated

The tool pools both households' figures into one debt-to-income ratio (DTI). Combined income is your income + cosigner income. Combined debt is your debt + cosigner debt + new payment, then DTI = combined debt ÷ combined income × 100. Use monthly amounts for all five fields: gross monthly income (before tax) and the monthly payments on existing debts such as cards, car loans or rent, plus the monthly payment of the new loan.

The answer is Yes when the DTI is 43% or lower, and No above it; exactly 43% passes. The 43% line is fixed in the tool, but real lenders set their own limits, and may look at more than DTI, for example credit scores and the type of loan. The combined income is also displayed. Both debts and the new payment can be 0, but the incomes together must be above zero. The tool does not check whether the cosigner is acceptable to a lender.

Worked example

You earn $2,400 a month with $600 of debt payments. Your cosigner earns $4,800 with $450 of payments. The new loan payment is $700. Combined income: 2,400 + 4,800 = $7,200.00. Combined debt: 600 + 450 + 700 = 1,750. DTI = 1,750 ÷ 7,200 × 100 = 24.31%, which is below 43%, so the answer is Yes. On your own, the DTI would be (600 + 700) ÷ 2,400 = 54.17%, which fails.

Try this example →

Common mistakes

  • Mixing yearly and monthly numbers. If incomes are annual but debts are monthly, the DTI looks about twelve times too good; use monthly for everything.
  • Using net pay instead of gross. DTI is normally measured against income before tax, so take-home figures make the ratio look worse.
  • Adding the cosigner's income but leaving out their debts. The cosigner's monthly debt payments belong in the total as well, otherwise the DTI is too low.
  • Leaving the new payment at 0. The loan you want to take must be included, so enter its expected monthly payment; the field cannot be left empty.
  • Reading Yes as a promise of approval. The 43% line is a fixed rule of thumb, and lenders can ask for a lower ratio or look at credit history and other factors.

Sources

About this calculator

When a borrower's income alone doesn't qualify for a loan, lenders can combine the borrower's and cosigner's income and monthly debts into a joint debt-to-income (DTI) ratio, typically checked against the roughly 43% qualifying threshold used in conventional loan underwriting — the benchmark behind the CFPB's Qualified Mortgage rule.

A cosigner is legally on the hook for the debt if the primary borrower defaults, so lenders evaluate the combined household's capacity to repay, not just the applicant's alone. This calculator is used by loan applicants and their prospective cosigners, loan officers, and financial advisors pre-qualifying an application before a formal credit check.

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Comments (1)

  • Editorial team

    A practical way to use the 43 percent line is to work backwards. With two incomes of 3,000 and 3,000 and existing debts of 500 each, a new payment of 1,580 gives exactly 43.00 percent and still passes, while 1,581 would not. Try a few payment levels to find the largest monthly payment the pooled figures can carry, then compare it with what you can truly afford. Which part of the application is the sticking point for you?

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