Modern life makes debt nearly inevitable — and, because of the power of your credit score, almost necessary. Knowing the difference between good and bad debt can help you make sound financial decisions and control the impact on your long-termfinancial health. What’s considered good debt versus...
A debt ratio of 0.6 (60%) or higher makes it more difficult to borrow money. Lenders often have debt ratio limits and won’t extend further credit to firms that areoverleveraged. Of course, there are other factors as well, such ascreditworthiness, payment history, and professional relationshi...
Pay off debt by organizing and tackling them with strategies like the snowball or avalanche method. Simplify repayment through refinancing or consolidation, stick to a budget that works for you and focus on paying down balances without adding new debt. ...
such as those found on mortgages, makes debt manageable. On the other hand, high-interest rates, such as those on payday loans and some credit cards, can lead to debt levels spiraling out of control.1
"Debt does not have to be your enemy if handled responsibly," says Michael Gerstman, the CEO of advisory firm Gerstman Financial Group LLC in Dallas. That means understanding why andwhen it makes sense to go into debt. To make smarter decisions about your money, brush up on the basics of...
While there is no hard rule about what qualifies as a "good" or "bad" DTI, lenders typically prefer to see ratios below 36%. Ratios above 43% are generally considered red flags. If your DTI is on the higher side, consider taking steps to pay off your debt or increase your income. ...
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You already know that practice makes perfect. The only way to have an informative answer and deliver it in a convincing way is to prepare it and practice in advance. To do this, jot down the main points you want to cover. Having nailed down the main ideas, head to theMock Interview to...
To lenders, a low debt-to-income ratio demonstrates a good balance between debt and income. The lower the percentage, the better the chance you will be able to get the loan orline of credityou want. A high debt-to-income ratio signals that you may have too much debt for the income ...
What Is a Good Debt-to-Equity Ratio? The optimal debt-to-equity ratio will tend tovary widely by industry, but the general consensus is that it should not be above a level of 2.0. While some very large companies in fixed asset-heavy industries (such as mining or manufacturing) may have...