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Debt-to-income ratio for car loan...
Debt-to-Income (DTI) Ratio Calculator
What is a Debt-to-Income Ratio?
Debt-to-income ratio (DTI) is the ratio of total debt payments divided by gross income (before tax) expressed as a percentage, usually on either a monthly or annual basis.
As a quick example, if someone's monthly income is $1,000 and they spend $480 on debt each month, their DTI ratio is 48%. If they had no debt, their ratio is 0%.
Debt-to-income ratio to buy a house calculator
There are different types of DTI ratios, some of which are explained in detail below.
There is a separate ratio called the credit utilization ratio (sometimes called debt-to-credit ratio) that is often discussed along with DTI that works slightly differently.
The debt-to-credit ratio is the percentage of how much a borrower owes compared to their credit limit and has an impact on their credit score; the higher the percentage, the lower the credit score.
Why is it Important?
DTI is an important indicator of a person's or a family's debt level.
Lenders use this figure to assess the risk of lending to them. Credit card issuers, loan companies, and car dealers can all use DTI to
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