9.
Credit Capacity Indicators * Not including housing 6-9 Debt Payments-to-Income Ratio monthly payments * monthly after tax income
10.
Credit Capacity Indicators Debt To Equity Ratio total liabilities net worth * = Should be < 1 *Excluding home value 6-10
11.
Debt-Payment Limits as a Percentage of Disposable Income * Excluding home mortgage loans and convenience credit to be repaid in full when the bill arrives. No, borrower should see a credit counselor. Overextended; borrower worries about debt 21 to 25 Only the fearless or foolhardy ask for more. Fully extended; borrower hopes that no emergency arises. 16 to 20 Should not be undertaken. Possibly safe limit; borrower feels some pressure. 11 to 15 Could be undertaken cautiously. Safe limit; borrower feels little debt pressure. 10 or less Take on Additional Debt? For Current Debt* Percent
14.
Monthly Installment Payments (Principal and Interest) Monthly Installment Payment (Principal and Interest) Required to Repay $1,000* *To illustrate, assume you want to know how much the monthly payment would be to finance a $9,000 loan at 10% for 3 years. To repay $1,000, the figure is $32.27, multiply by 9 (for $9,000) to determine that $290.43 is required for 36 months of payments. When using amounts greater or less than $1,000, convert using decimals. For example, a loan of $950 at 10 percent for 3 years would be calculated as follows: $32.27 x 0.95 = $30.66. 26.49 25.39 24.32 23.27 22.24 21.25 20.28 19.33 18.42 5 years (60 months) 30.43 29.37 28.34 27.33 26.33 25.36 24.41 23.49 22.58 4 years (48 months) 37.16 36.15 35.16 34.18 33.21 32.27 31.34 30.42 29.52 3 years (36 months) 50.90 49.92 48.96 48.01 47.07 46.14 45.23 44.32 43.42 2 years (24 months) 92.63 91.68 90.73 89.79 88.85 87.92 86.99 86.07 85.15 1 year (12 months) 20% 18% 16% 14% 12% 10% 8% 6% 4% Terms of Installment
25.
Manage Over-indebtedness 1. Determine what is owed. 2. Focus budget on debt reduction. 3. Contact creditors. 4. Take on no new credit. 5. Refinance. 6. Find good help. 7. Avoid bad help.
26.
Manage Student Loan Debt 1. Choose most advantageous repayment pattern allowed. 2. Consolidate student loans. 3. Pay electronically. 4. Be punctual with repayments. 5. Refinance with second mortgage loan.
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