How do lenders treat 401(k) loans or personal loans in DTI?

How do 401(k) and personal loans affect my DTI?

You want to know how lenders count 401(k) loans and personal loans when calculating your debt-to-income ratio. Both types of loans typically count as monthly debt obligations in DTI calculations, but lenders handle them differently.

Lenders commonly include personal loan payments in DTI since these are standard monthly debt obligations that appear on your credit report. The monthly payment amount gets added to your other debts (credit cards, car loans, student loans) when calculating your total monthly debt.

401(k) loans get more varied treatment. Many lenders include the monthly repayment amount in DTI calculations, while others may exclude 401(k) loans since the borrower is essentially paying themselves back. The approach depends on the lender's guidelines and loan program requirements.

Check your credit report to see which loans appear there, and ask your lender how they handle 401(k) loan payments specifically. You can also review any pre-qualification letters or loan estimates to see which debts the lender included in your DTI calculation. Share your loan documentation with the lender and they can walk you through exactly how each debt affects your DTI ratio.