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How to Calculate DTI: Step-by-Step Guide to Improve Your Financial Health

Last updated: April 7, 2025

Managing your finances can feel overwhelming, especially when you're juggling multiple debts and expenses. Understanding your debt-to-income (DTI) ratio is a crucial step toward taking control of your financial health.

By calculating your DTI, you gain valuable insights into your financial stability and borrowing capacity. Whether you're planning to apply for a loan or simply want a clearer picture of your financial situation, knowing how to calculate DTI empowers you to make informed decisions.

What Is Debt-To-Income Ratio

Debt-to-Income (DTI) ratio measures your monthly debt obligations compared to your gross monthly income. A lower DTI indicates stronger financial health, showing that a smaller portion of your income is dedicated to debt payments. Lenders use DTI to evaluate your ability to manage monthly payments and repay debts.

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