Debt to Income (DTI) Calculator
Calculate your debt-to-income ratio effortlessly with our user-friendly Debt to Income Calculator. Gain financial insights and make informed decisions today!
Related Calculators: Debt Repayment Calculator, Cost of Debt Calculator, Amortization Schedule Calculator, Cost of Capital Calculator
Debt-to-Income Ratio Formula
The debt-to-income (DTI) ratio is a financial measure used to assess an individual's or household's ability to manage debt payments. It is calculated by dividing the total monthly debt payments by the gross monthly income and multiplying the result by 100 to express it as a percentage.
The formula for calculating the debt-to-income ratio is as follows:
DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) * 100
The lower the DTI ratio, the better, as it indicates a lower proportion of debt compared to income. Lenders often use this ratio to evaluate loan applications and determine an individual's financial health.
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