TERM OF THE DAY debt to income ratio DTI. A figure that calculates how much of a persons income is spent paying his or her debts. The higher ones 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 persons 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.
Posted on: Mon, 21 Apr 2014 11:01:39 +0000
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