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Debt-to-Income Ratio – What Does That Mean?

Think of debt-to-income ratio as a snapshot of your current financial standing. It reflects the amount of your debt in relation to your monthly income. Lenders use it when considering your credit status.

To calculate yours, simply divide your total monthly debts by your monthly gross income. Lenders generally look for a number in the range of 20% to 35%, with a lower number being better.

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