What should my debt to income ratio be for a consolidation loan?
Message: Guest
Posted: Sat May 22, 2004 2:40 pm
Post subject: Debt to income ratio
What is the average debt to income ratio that banks go up to for a debt consolidation loan? (Personal UNsecured loan) The bank I'm applying with say thay they DO count the exisiting bills monthly payments like they will still be there even after they are paid off. They are really conservative. But anyways, what debt to income ratio do big name banks use?
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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 354
Posted: Sat May 22, 2004 3:53 pm
Lenders set their own policies, of course. Often 36% is the cut-off point according to:
bcsalliance.com/y_debtratio.html
That link also says:
Quote:
Do not include grocery, telephone, and utility bills or any debt that will be paid off in the next few months. If your car loan will be paid off two or three months from now, don't include it in the equation.How absurd this all is! Why aren't grocery/telephone/utility bills included in the calculation? Don't they have to be paid too? Why is the ratio important rather than the difference between the fixed expenses and your income--that's the number that shows how much money you have to spare. And if the point of a loan is to consolidate debts at a lower interest rate, what difference does it make what your payments are NOW or how much money you owe NOW as long as you can make the payments on the loan you're taking out to pay off those other debts? Your debt isn't going up--your payments are going down. If you're able to pay your bills now, you'll be able to pay them after consolidating the debt at a lower interest rate too. (Yes, circumstances can change--but that's always true regardless of the current debt or lack of debt, isn't it?) Silly. Silly banks. Stupid banks.
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
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Author: Moth
Guest
Posted: Sat May 22, 2004 4:40 pm
Banks are happy to loan you money if you can demonstrate that you don't actually need it. In other words they're looking for the financially insane.
Moth
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Posted: Sat May 22, 2004 2:40 pm
Post subject: Debt to income ratio
What is the average debt to income ratio that banks go up to for a debt consolidation loan? (Personal UNsecured loan) The bank I'm applying with say thay they DO count the exisiting bills monthly payments like they will still be there even after they are paid off. They are really conservative. But anyways, what debt to income ratio do big name banks use?
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Author: Polonius
Credit Expert (100+ Posts)
Joined: 19 Jan 2004
Posts: 354
Posted: Sat May 22, 2004 3:53 pm
Lenders set their own policies, of course. Often 36% is the cut-off point according to:
bcsalliance.com/y_debtratio.html
That link also says:
Quote:
Do not include grocery, telephone, and utility bills or any debt that will be paid off in the next few months. If your car loan will be paid off two or three months from now, don't include it in the equation.How absurd this all is! Why aren't grocery/telephone/utility bills included in the calculation? Don't they have to be paid too? Why is the ratio important rather than the difference between the fixed expenses and your income--that's the number that shows how much money you have to spare. And if the point of a loan is to consolidate debts at a lower interest rate, what difference does it make what your payments are NOW or how much money you owe NOW as long as you can make the payments on the loan you're taking out to pay off those other debts? Your debt isn't going up--your payments are going down. If you're able to pay your bills now, you'll be able to pay them after consolidating the debt at a lower interest rate too. (Yes, circumstances can change--but that's always true regardless of the current debt or lack of debt, isn't it?) Silly. Silly banks. Stupid banks.
Polonius
"Neither a borrower, nor a lender be; For loan oft loses both itself and friend"
View our latest credit card ratings!
Author: Moth
Guest
Posted: Sat May 22, 2004 4:40 pm
Banks are happy to loan you money if you can demonstrate that you don't actually need it. In other words they're looking for the financially insane.
Moth
View our latest credit card ratings!
posted by CardRatings.com at 3:39 PM
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