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Ch 06. Assignment Using Credit 3. Debt safety ratio - How much credit can you stand? To maintain financial stability, people should know how much credit they can comfortably tolerate. The debt safety ratio is a computation that definet one's monthly loan repayment burden. It compares loan obligations to income. The formula for the debt safety ratio is! Dell Safety Ratio Debt Safety Ratio Clancy wants to determine his current debt safety ratio. His monthly take-home pay is $5,000, He compiled the following monthly loan payment Information Type of Loan Payment Amount Auto $525 Student Credit cards House mortgage 75 150 1.600 Total 52,350 and The total monthly toan payments figure Clancy will use when computing his debt safety ratio's mortgage include his house Clancy's debt safety ratio is We and considered Clancy's debt safety ratio changed to 20%. His take-home pay must have or his monthly loan payments must have Lenders may now be willing to give him a loan than they were before this change. How can periodically computing one's debt safety ratio be useful? Check all that apply it can influence decisions about looking for a higher or lower payinglob Safety Ratio Clancy wants to determine his current debt safety ratio. His monthly take home pay is $5,000. He compiled the following monthly loan payment Information Amount Type of Loan Payment Auto Student Credit cards 5525 75 150 Houte mortgage 1,600 Total $2,350 and include his house The total monthly loan payments figure Clancy will use when computing his debt safety ratio is mortgage Clancy's debt safety ratio is % and considered Clancy's debt safety ratio changed to 20%. His take-home pay must have or his monthly loan payments must have Lenders may now be willing to give him a loan than they were before this change How can periodically computing one's debt safety ratio be useful? Check all that apply It can influence decitions about looking for a higher or lower paying job. It can serve as an early warning system of approaching financial trouble, providing time to take preventive measures It can influence decisions whether to return to school, it a loan will be needed to pay for it