- Debt To Income Ratio:
- What does Debt to Income Ratio mean?
- The Debt to Income Ratio or DTI ratio is a valuable number and is as important as the credit score. It's exactly the amount of debt you have as compared to the overall income.
- Dividend Payout Ratio = Dividends / Net income for the same period
For example, if a person pays $2,000 a month for a mortgage, $300 for an auto loan and $700 for the rest of the bills, therefore, the total monthly debt equals $3,000.
If the gross monthly income is $7,000, divide it into the debt ($3,000 / 7,000).
According to the formula:-
Debt-to-income ratio is 42.8%
- Jun 4, 2018
- Tool Launched