Debt Rate

Debt rate = Total monthly debt payment/Monthly take-home pay

Example: If your total monthly debt payment is
$200 and your monthly take-home pay is $1,200,
what is your debt rate?
$200/$1,200 = 16.6%

• 10 percent or less
Congratulations! You are in the safe limit
and probably feel little debt pressure.

• 11 to 15 percent
You are in the safe limit but you may feel
some debt pressure. Be cautious about taking
on more debt.

• 16 to 20 percent
You are probably hoping that no emergency
arises. Start working on reducing your debt.

• 21 to 25 percent
You are probably worrying about your debt
load. It is time for a dramatic change. You
may need help from a credit counselor.

• 26 percent or more
You definitely have more credit than you can
handle. You need professional help
immediately to reduce your debt.