A sound understanding of how to calculate debt-to-income ratio is critical to your overall financial health. Rather than guess and hope for the best, this blog post breaks down everything you need to know about the debt-to-income ratio.
Debt-to-income ratio (DTI) is a financial metric that shows how well you manage debt repayment in relation to your total income.
In short, it’s the percentage of your gross monthly income that goes towards paying your monthly debts. Lenders use this to gauge your creditworthiness and risk level, influencing whether you get approved for loans and the interest rates you’re offered.
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