safe ratio and monthly payment what does it mean

[James]

I downloaded an office tool,Consumer Debt Manager, and the statement "safe
ratio and montly payment" is in a cell. What does it mean?

[surg4u1975]

A safe ratio is the percentage of debt you are comfortable carrying given your current income level. Usually around 15-20%, although most Debt Managers allow you to put in what you want here and banks allow up to 40%. The safe monthly payment is that percentage times your monthly income i.e. 20% with an income of $3000 would give a monthly payment of .20*3000 = 600.

Your Consumer Debt Manager is probably calculating that as a standard then comparing your actual debt to income ratio and monthly payment amount to the safe ratio. It should then indicate if you are within a safe level or exceeding your safe level.

If you want to research the 'safe ratio' look for 'desirable debt to income ratios' or something similar as that is what it really is.