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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.
Related Terms
Fair and Accurate Credit Transactions Act (FACT Act)
A federal law that aims to protect consumers from identity theft and fraud by providing greater access to and control over their credit information
Check
A written instrument that directs a bank to pay a specific sum of money to the bearer or named payee.
Mobile Payments
A way of making transactions using a mobile device, such as a smartphone or tablet, often made using a mobile payment or banking app.