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Debt-to-Income Ratio (DTI)
A measure of how much of an individual's monthly income is consumed by debt payments.
More Details
A debt-to-income (DTI) ratio is a financial metric used to assess the financial health of an individual or household. It is calculated by dividing the total amount of debt that an individual has by their gross income (total income before taxes and other deductions).
Example
If you have a gross income of $50,000 per year and total debts of $10,000 per year, your DTI ratio would be 20%. This means that 20% of your gross income is being used to pay off debts.
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