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28 October, 12:03

Owen makes $3,000 per month. He spends $300 on credit card payments and $350 on an auto loan. What is his debt-to-income ratio?

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  1. 28 October, 12:53
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    His debt-to-income ratio is 25%. The debt-to-income ratio shows the portion of your income which you have used for paying loans payment. The debt-to-income ratio can be calculated by dividing the sum of all loan payments with the monthly income. This ratio functions as the payment ability indicator of a person to identify their qualification for taking a loan agreement.
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