A debt ratio is required by lending institutions before a consumer can successfully apply for a loan. A calculation of the ratio becomes a daunting challenge to a consumer. A number of indebted households questions chip in, where finding out whether you are in debt becomes a challenge. Further still, determining the debt ratio and pondering the consequences of high debt ratio also haunt consumers. This is normally needed before a consumer gets to have the loan application processed.
This ratio is calculated from the gross income of a household occupant, where different terms plays role. Some situations may demand that the ratio should not exceed a certain maximum, say 40 percent. It therefore goes without say that going beyond the maximum debt ratio lead to automatic disqualification. A consumer must therefore know how to maintain a certain debt ratio.
When borrowing money, a consumer may realize that the more the amount sought for the lower the interest rate. This can be an encouragement from the bank to such for more funds even exceeding the required amounts. Sometimes doing this could lead to financial suicide especially if the returns are unfavorable. Consumers must therefore calculate the profits from their investments before making any financial decision.
During calculation of the debt ratio, various factors take centre stage. Among them is whether the consumer is married and if so, whether child support exist. Other expenses like rent or mortgage, insurance, credit card loans are other determinants. Loans and accumulated interests ranging from personal, automobile, student among others also matters.
So how can one determine the period of indebtedness? Is there financial impact of such a situation? A financial statement prepared by a qualified administrator can help solve all these issues. One would have to visit the relevant authorities to determine the stated period of bankruptcy. Here, it may come as a shock that being employed or not offers no relief to the indebtedness. A consumer would even be required to continue paying the monthly arrears promptly regardless of the income patterns.
Can a private asset such as a car or a house be repossessed in case of a consumer being in debt? Yes and no. When the property is on lease, it is assumed that the ownership if the property lies squarely on the leasing company. This may spare the owner from the worry of losing it. Other cases where property is fully bought by the consumer, creditors may repossess it. A consumer may be tasked with a buying back plan with the creditor. A monthly payment to the company is required for the owner to claim back the property.
Are there further consequences of being over indebted? In deed there are and one has to find out the impact on such before it is too late. A consumer may be allowed by a bank to operate an account as far as they prove to be worth it. One will therefore be required to prove his or her trustworthiness by providing valid documents. Fraud is very discouraged and any attempt to try the same can leave the consumer disqualified by operating any bank out.
Can the indebted household consumer be at liberty to transact personal businesses? Again, a few rules apply here though one would carry out a self employment venture without many worries. Being an administrator of a corporate company is the only limiting factor, and therefore one can only operate under less managerial role.
This ratio is calculated from the gross income of a household occupant, where different terms plays role. Some situations may demand that the ratio should not exceed a certain maximum, say 40 percent. It therefore goes without say that going beyond the maximum debt ratio lead to automatic disqualification. A consumer must therefore know how to maintain a certain debt ratio.
When borrowing money, a consumer may realize that the more the amount sought for the lower the interest rate. This can be an encouragement from the bank to such for more funds even exceeding the required amounts. Sometimes doing this could lead to financial suicide especially if the returns are unfavorable. Consumers must therefore calculate the profits from their investments before making any financial decision.
During calculation of the debt ratio, various factors take centre stage. Among them is whether the consumer is married and if so, whether child support exist. Other expenses like rent or mortgage, insurance, credit card loans are other determinants. Loans and accumulated interests ranging from personal, automobile, student among others also matters.
So how can one determine the period of indebtedness? Is there financial impact of such a situation? A financial statement prepared by a qualified administrator can help solve all these issues. One would have to visit the relevant authorities to determine the stated period of bankruptcy. Here, it may come as a shock that being employed or not offers no relief to the indebtedness. A consumer would even be required to continue paying the monthly arrears promptly regardless of the income patterns.
Can a private asset such as a car or a house be repossessed in case of a consumer being in debt? Yes and no. When the property is on lease, it is assumed that the ownership if the property lies squarely on the leasing company. This may spare the owner from the worry of losing it. Other cases where property is fully bought by the consumer, creditors may repossess it. A consumer may be tasked with a buying back plan with the creditor. A monthly payment to the company is required for the owner to claim back the property.
Are there further consequences of being over indebted? In deed there are and one has to find out the impact on such before it is too late. A consumer may be allowed by a bank to operate an account as far as they prove to be worth it. One will therefore be required to prove his or her trustworthiness by providing valid documents. Fraud is very discouraged and any attempt to try the same can leave the consumer disqualified by operating any bank out.
Can the indebted household consumer be at liberty to transact personal businesses? Again, a few rules apply here though one would carry out a self employment venture without many worries. Being an administrator of a corporate company is the only limiting factor, and therefore one can only operate under less managerial role.
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