Now that you know how much you owe, it's important to know your debt to income ratio. Input your total monthly debt payment and divide it by your monthly income in the formula and divide it by below to determine whether you are have too much debt.
Total Monthly Debt Payment / Net Pay (Take Home) = Debt to Income Ratio
If your debt to income ratio is:
- Less than 15% -- You are managing your credit.
- Between 15% and 20% -- You are dangerously close to being debt heavy. Consider getting assistance from a credit counseling agency with developing a spending plan.
- Over 20% -- Call a credit counseling agency immediately. Credit counseling agencies are experienced in assisting consumers who have overwhelming debt problems.