The debt load rate of the borrower allows the bank to appreciate its solvency when considering a loan application. The higher this to show, the addition to get approval.
In our article, we will look at the main aspects of PD, as well as its influence on the fate of the borrower.
PDN or Debt Load Indicator
If the borrower has several existing loans, payments for which are more than half of the wages, then issuing a new loan is very risky. To preserve your profits and reduce the risks of its loss, the bank will either refuse to cooperate with such a borrower, or will offer a loan with a high interest rate.
To reduce the landscape of Russians since the autumn of 2019, the Central Bank introduced a mandatory assessment of the debt load of borrowers.
To calculate the Debt Load Indicator, the formula is used in which the total amount of monthly spending on loans is divided into income size. This method of calculation will help to pre-evaluate your solvency to any borrower.
Credit and financial organizations take into account current loans and loans, as well as credit cards.
In addition, if you are a guarantor or coaches, information on monthly payments of the main borrower goes into the calculation of your debt burden.
A high debt burden rarely enables the Bank to issue a loan, as the lender risks to face the situation when the borrower cannot continue to fulfill its credit obligations and return funds.
In such cases, the borrower can offer the bank to attract a contemporary or guarantor to his loan, which will guarantee the fulfillment of all conditions of the loan agreement. Or a client can provide a bank of mortgage property, which will reduce the risks of loss of profit by the lender.
The debt load rate should be less than 50% of the total loan obligations. Then you can comfortably pay loans, as well as life needs.
If your income crosses the border of the subsistence minimum, then the maximum debt load rate should be not more than 30%.
It is possible to reduce the debt burden by combining several loans to one, reduce the limit on the credit card, restructuring the debt, early repayment of the loan, refinancing from another lender on more favorable terms.
After prevalent to evaluate your platform, you are still before the bank, you will have an idea of a possible solution on a loan application. An adequate analysis of its expenses towards wages will allow to objectively assess the possibility of credit approval.
It is important not to forget that in addition to loans, your income is spent on the vital needs that require considerable spending.