Gina would like to apply for a loan, but knows that her current debt-to-income (DTI) ratio will keep her from being approved. Her current monthly debt includes a rent payment of $950.00, a car payment of $238.00, a student loan payment of $149.00, and two credit cards with a combined minimum monthly payment of $78.00. The bank requires a DTI of 36% in order to approve Gina?s loan application. What would Gina's gross monthly income need to be to get approved for the loan?
Add Gina’s monthly debt payments: $950 + $238 + $149 + $78 = $1,415. Since DTI is monthly debt divided by gross monthly income, her income must be at least $1,415 ÷ 0.36 = $3,930.56. The correct choice is at least $3,930.56.
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