Today we shall learn something about Debt to income ratio. Let us first see an example how to calculate debt to income ratio. If you divide the monthly debt payment with the monthly debt income you will get the debt to income ratio.
Consider an example:
Monthly Expenditure
Credit Card $400, Student Loans $100,Car Payments $200,Other Debt Payments $100
Total Monthly Payments $800
Monthly Income
Salary / Wages $2,000.00, Bank and Investment Interest $100, Rental Income $500.00, Business Income (Draw)
Total Income $2700
The debt to income ratio will be 29%
You can use this debt income ratio to find out your position and further use it to judge your position on where you stand presently, so that you can adjust yourself accordingly.
Consider an example:
Monthly Expenditure
Credit Card $400, Student Loans $100,Car Payments $200,Other Debt Payments $100
Total Monthly Payments $800
Monthly Income
Salary / Wages $2,000.00, Bank and Investment Interest $100, Rental Income $500.00, Business Income (Draw)
Total Income $2700
The debt to income ratio will be 29%
You can use this debt income ratio to find out your position and further use it to judge your position on where you stand presently, so that you can adjust yourself accordingly.
