Debt to Income Ratio & Car Leasing

A debt-to-income ratio is the amount of money you have coming in--proved by your income--versus the amount of money you pay out for your debts--listed on your credit report. Leasing institutions often require proof of income before providing an approval.


Do not lie about your income, where you work or your mortgage payment when applying for your lease. All of your debts, such as credit card payment amounts, balances and your mortgage payments are listed on your credit report for lenders to see. In addition, the bank can ask you to prove your income by requiring recent pay stubs or W2s.


If you have a high amount of debt and an income that barely covers it, you will have a hard time finding a lease approval. Check your credit before you apply for the lease to ensure your credit history is accurate. If you have recently lost your job or cannot prove your income, you may not be approved at all.


It is more difficult for business owners to prove income. Rather than provide proof of recent pay stubs, the bank can ask you to show several years of tax information to verify your income. Also, if your credit score is very high--the score is determined by lenders--you may not have to prove your income at all. Debt-to-income ratios are determined by banks differently, although many prefer your ratio to fall under 30 percent to qualify for a low rate.