Most people can easily handle short-term debt (e.g., credit card and installment loan payments and other consumer debts excluding a mortgage) that does not exceed 10% of their net (also called take-home) pay. For example, if your monthly net income is $2,500, multiply it by 0.10 = $250 monthly debt payment. While manageable, a 15% debt-to-income ratio is not quite so comfortable, particularly if an individual or family has high ongoing expenses for items such as child care or medical bills. Your total monthly consumer debt payments should not exceed 20% of your monthly net income.
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