The Debt-to-Income Ratio (DTI) is a key factor that lenders consider when determining loan eligibility. It is calculated by dividing your total monthly debt payments by your gross monthly income. Lenders generally want a DTI ratio below a certain percentage, with 36% being a common limit. A lower DTI indicates that debt payments make up a smaller portion of your gross monthly income, which can increase your chances of qualifying for a loan and being offered better interest rates.