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Debt load is a term that is used to describe
a consumer's amount of debt. It is often used to understand
if you are carrying a "safe" amount of credit. Creditors look
at a debt/income ratio, comparing your income with your expenditure
to analyze whether you have too much debt. The debt/income ratio
reveals either how good, or bad, your financial picture is on
a regular basis.
You can figure out this ratio for yourself. Add all your non-housing
monthly payments except for your utilities and taxes. Then compare
that total with your total gross annual wages divided by 12. When
you divide your monthly debt payments by your total monthly
income, you will get your monthly non-housing debt/income ratio.
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Example
Gross monthly income is RM2,000
Monthly debt is RM500 (eg.credit card
payments,petrol bills and car payments etc)
RM500/RM2000 = 25 percent
your debt/income ratio is 25 percent |
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