Your consumer debt ratio is your monthly take-home pay divided by your monthly consumer debt payments, expressed as a ratio. For this calculation do not include your mortgage, rent or home equity payments, or credit card expenditures that you pay in full each month, but do include all other monthly debt payments: car and truck loans, credit card balances, personal loans, school loans, and installment debt.
Here's an example of how to calculate it:
Car/vehicle payment |
$300 |
Credit card payments |
$100 |
Student loan payments |
$200 |
Other loan payments |
$0 |
a) Total consumer debt payments |
$600 |
b) Monthly take-home pay |
$2,500 |
Consumer Debt Ratio = |
24% |
Do You Have Too Much Debt?
SUGGESTION: The Consumer Credit Counseling Service (CCCS) is a not-for-profit agency that provides credit counseling. Contact the National Foundation for Credit Counseling (NFCC) toll-free at 1-800-388-2227 or online at www.nfcc.org to locate a local CCCS office.
IMPORTANT NOTE: Interest rates on consumer debt can be hazardous to your financial health. If you have $10,000 of credit card debt at 18%, and you are paying it off at the rate of $200 per month (and not adding to it), it will take you almost eight years to pay it off. If the rate is only 10%, it will still take you about five and one-half years.
First United offices will be closed, Saturday, August 20; to celebrate our employees with a company-wide event.
You may still access First United through our ATM Network, or using Online or Mobile banking.