debt to income ratio


DTI. A figure that calculates how much of a person's income is spent paying his or her debts. The higher one's debt to income ratio, the more of their monthly income that is solely devoted to paying back debts. DTI is important to manage, because it is something often considered by institutions when they evaluate loan creditworthiness; institutions conclude that if a person's DTI is too high, they might not be able to pay back their debts very easily, and the institution will be less inclined to make the loan. Formula: monthly debts owed divided by monthly income.

Use this term in a sentence

I had to determine our debt to income ratio, which would determine how much money we had to spend on things.


The debt to income ratio was checked as it is a useful metric for providing insight into the financial health.


If you want to make sure that you will be able to pay off all you owe then you need to know your debt to income ratio.


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