Your final result will fall into one of these categories.
36% or less is the healthiest debt load for the majority of people. Avoid incurring more debt to maintain a good ratio.
37%-42% isn't a bad place to be. If your ratio falls in this range, you should start reducing your debts.
43%-49% is a ratio that indicates likely financial trouble. Start paying your debts now to prevent an overloaded debt situation.
50% or more is a dangerous ratio. You should be aggressively paying off your debts. Don't hesitate to seek professional help.
Example
In our example, Sam's debt to income ratio is 38.5%. This isn't a bad ratio, but it could become worse if Sam increases his monthly debt payments without increasing his income.
