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How to Calculate DTI: Step-by-Step Guide to Manage Your Debt-to-Income Ratio
Last updated: April 7, 2025
Understanding your Debt-to-Income (DTI) ratio is crucial for managing your finances effectively. It gives you a clear picture of how much of your income goes towards paying off debts, helping you make informed decisions about budgeting and borrowing.
Calculating your DTI is simpler than you might think. By knowing your DTI, you can assess your financial health, improve your creditworthiness, and better prepare for significant financial commitments like buying a home or car.
In this article, you'll learn the step-by-step process to calculate your DTI, along with tips to improve it, ensuring you stay on top of your financial goals.
