Can I get a debt consolidation loan with a high debt-to-income ratio?

What is a debt-to-income ratio?

Your debt-to-income ratio (DTI) measures how much of your monthly income goes towards repaying debts. Lenders use it to judge whether you can comfortably afford to borrow more.

How to calculate your debt-to-income ratio

Add up all your monthly debt payments — things like mortgages, loans, credit cards, and car finance — then divide that total by your gross monthly income (before tax). Multiply by 100 to get a percentage.

Example: If you pay £500 a month in debts and earn £2,000 before tax, your DTI is 25%, e.g. £500 ÷ £2,000 = 0.25, multiplied by 100 = 25%

What is a good debt-to-income ratio?

There is no single rule, and thresholds vary between lenders, but here is a rough guide:

DTI	What it suggests
Under 20%	Healthy — most lenders see you as low risk
20–35%	Manageable — comfortable for most lenders
36–49%	Getting high — some lenders may be cautious
50% or above	High — mainstream lenders may decline, but specialist lenders exist

A DTI above 50% is high by most lenders' standards, but it is not a dead end.

What is debt consolidation?

Debt consolidation means taking out a single loan to clear several existing debts at once. Instead of managing multiple repayments each month, you make one. It can lower your monthly outgoings, possibly reduce how much interest you pay, and make your finances easier to manage.

Can you still get a loan with a high DTI?

Yes. High-street banks tend to be stricter, but many specialist lenders look at your full financial picture rather than DTI alone. They often consider:

• Your employment status and income stability
• Whether you have assets (for a secured / homeowner loan), or a guarantor
• Your track record of making payments on time (by checking your credit report)
• How long you have held your current debts

Can a consolidation loan lower your DTI?

Yes. This is one of the main reasons debt consolidation can make sense when your DTI is already high.

Example: If your gross monthly pay is £2,000 and your current debts cost you £800 a month, a consolidation loan bringing that figure down to £500 a month means your DTI drops from 40% to 25% — without your income changing at all. This can open up better borrowing options further down the line.

How we helped

The Grahams from Newcastle were paying £2,225 towards their debts each month and had a debt-to-income (DTI) ratio of 35%.

After we helped them consolidate their debts with a secured loan, they now pay just £654 each month, and their DTI ratio has dropped to 10%.

What to watch out for

A consolidation loan can be a sensible move, but there are a few things worth knowing before you apply:

• A lower monthly payment can mean paying more interest overall if the loan runs over a longer term — always check the total amount repayable, not just the monthly cost
• If the loan is secured against your home, missing payments could put your property at risk
• Consolidating your debts only helps if you avoid taking on new borrowing at the same time

Finding the right loan for your situation

If a large chunk of your income goes on debt repayments every month, a consolidation loan could reduce what you pay each month, simplify your finances, and help bring your DTI down to a more manageable level.

Specialist lenders do exist for borrowers with a high DTI — a broker can help you find them and check your eligibility without affecting your credit score.