How to work out your debt burden

Your debt burden shows what share of your income goes to monthly payments on all your loans. The lower it is, the easier it is to pay on time, even when unexpected expenses come up.

You need two numbers: your net monthly income (all regular money coming into the family budget) and the total of monthly payments on all current loans. If you plan a new loan, add its first payment too — with differentiated payments the first one is the largest.

Example: income of 6,000,000 soum a month and 1,000,000 soum paid on an existing loan. Borrowing 10 mln soum for 12 months at 4% a month makes the first payment 1,233,333 soum. In total that is 2,233,333 soum, about 37% of the income.

It is usually recommended that payments on all loans stay below half of your income. Lenders also assess the debt burden when they review an application. If the payments come close to half of your income, consider a smaller amount or a longer term.

The calculator on our site lets you change the amount and term and see the first payment and the full cost of the loan at once. Talk it over with your family before you decide.