Debt-to-income ratio (DTI) is the proportion out-of complete personal debt money split of the gross income (prior to income tax) conveyed given that a portion, always on the either a month-to-month or yearly base. As the an easy analogy, when the someone’s month-to-month income try $step one,000 and so they spend $480 towards obligations per month, the DTI ratio is actually 48%. When they didn’t come with financial obligation, their proportion was 0%. You can find different types of DTI ratios, many of which are informed me in detail lower than.
Discover a different sort of proportion called the borrowing from the bank use ratio (sometimes entitled personal debt-to-borrowing from the bank proportion) that is will talked about along with DTI that actually works a little in another way. (altro…)