ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The average American holds a debt balance of $96, 371, according to 2021 Experian data, the latest data available. That’s up 3.9 percent from 2020’s average balance of $92, 727, largely due to the rising balance of mortgage and auto loans.

Detailed explanation-2: -Ideal debt-to-income ratio for a mortgage In terms of your front-end and back-end ratios, lenders generally look for the ideal front-end ratio to be no more than 28 percent, and the back-end ratio, including all monthly debts, to be no higher than 36 percent.

Detailed explanation-3: -What is an ideal debt-to-income ratio? Lenders typically say the ideal front-end ratio should be no more than 28 percent, and the back-end ratio, including all expenses, should be 36 percent or lower.

Detailed explanation-4: -What is the 20/10 Rule? The 20/10 rule follows the logic that not more than 20% of your yearly net income should be spent on consumer debt, and no more than 10% of your net monthly income should go towards paying the debt repayments.