How to calculate your debt ratio

In 2015, the household debt ratio in United States increased by 0.5 points over three months. And we see that this figure is becoming more and more important. Let us remember that the debt ratio is nothing other than the percentage used to assess the borrowing capacity. It is generally calculated by taking the difference between income (net salaries, profits, rents received, annuities and pensions received, social allowances) and charges (loans in progress, pensions paid, rents, etc.) . With credit organizations, this is an important criterion for granting or not a loan to a person. Note that the monthly payments to be paid should not exceed 33%. Zoom on the calculation of the debt ratio!

Each situation has its own case!

A situation, its own case and conditions. By taking the variable income including commission, bonus, etc., you will be asked to establish the base on your salary, seniority included. A larger income will mean a little more.

Know that a Cashloans will not lend you if your debt ratio exceeds 33%, to roughly calculate you take your net salary and you only keep 33% for example for a monthly net salary of 1600 US dollars you will not have to in no case exceed the monthly payment of $ 528 under penalty of seeing your request refused by your banking advisor. Note that in addition to this you will have to try to apply for credit over the shortest possible repayment period, because the shorter the repayment period, the lower the total cost of the credit will be. The goal is to achieve the best possible balance between amount, duration and monthly payment.

And finally for small incomes, it will be undeniable to use the family quotient to ensure if the family can still meet their basic needs after settlement of the credit .

The key to low income - the family quotient

To discuss the case of small incomes, it will be a question of the family quotient. Easy to calculate, if the quotient exceeds 4,500 US dollars, the rate will be given without problem. The opposite will be a little more chaotic because the rate will be a little more difficult to obtain.

Identify, study, analyze any eventuality before resorting to any type of loan to avoid falling into the trap of over-indebtedness. Do not hesitate to consult our list of credit organization to find out which one will offer you the best rate in relation to your financing needs.

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