How to calculate your debt capacity

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Debt capacity is a key indicator that determines how much money you can borrow without compromising your financial health .

This calculation takes into account your income, expenses, and other financial commitments to establish a safe debt limit.

Whether you want to buy a home, finance a car or consolidate your debts, your debt-to-income ratio will determine whether you can get that loan.

Have you ever felt like you have your ivory coast mobile database under control, with some credit card debt and maybe a personal loan, you never miss payments, and when you've tried to apply for a loan, you're rejected? It's possible that you're above your ability to pay.


Steps to calculate your debt capacity

Determine your monthly net income, that is, the money left after deducting taxes and other mandatory deductions.

Compare it to your spending budget , that is, the sum of all the fixed payments you make each month such as utility bills, food, transportation, including rent or mortgage, bills, food expenses, and any other recurring financial commitment.

Once you have this information clear, subtract your expenses from your income; the result represents your ability to pay a debt.