How much debt is “too much debt”?

To put it simply, you should have 30% or less recurring debt to income.

In other words, if I have a car payment, mortgage and a student loan, those all get included in recurring debt. Add in monthly credit card minimums and you have the full number.

For instance, if your car payment is $350, your mortgage is $750, your student loan payment is $150 and your total minimum credit card payments are $200, then your monthly recurring debt is $1450. If you are making under $3000 per month, then this is likely a problem.

Remember, this is not for the totality of your debt, but just the recurring debt.

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