To understand the process clearly, we may take an example. Say you have to pay every month $400 as your credit card payment, $200 as your car loan installment and $1400 as rent. By adding these all we get a figure of $2000. And if your monthly gross income (income before taxes are paid) is $5000, by dividing 2000 by 5000 we shall get figure 0.4, which when multiplied by 100 will become 40 percent. So in this example, the debt to income ratio is 40%.
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