Debt-to-Income (DTI) Ratio

Definition

The Debt-to-Income (DTI) ratio is a personal finance measure that compares an individual's gross monthly income to their total monthly debt payments. It is one of the most critical metrics used by underwriting algorithms.

Algorithmic Impact

A DTI ratio below 36% indicates strong financial health and drastically increases the probability of instant loan approval. High DTIs signal over-leverage to liquidity nodes.

Frequently Asked Questions

Frequently Asked Questions in USA

How do I calculate my DTI ratio?

Divide your total recurring monthly debt (rent, mortgage, credit cards, auto loans) by your gross monthly income (income before taxes), then multiply by 100 to get the percentage.

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