Back-End Ratio

  

Categories: Metrics, Banking, Accounting

Bankers are notoriously stingy. Remember applying for your first car loan, and the banker in the polyester suit telling what you can afford versus what you desired? BMW versus a Ford?

He or she was basing that yes-or-no decision on your back-end ratio. No, that is not the size of your butt compared to your waist. A back-end ratio is just a calculation to show how much dough you have left from your current income after paying your current bills. Most banker boys (or girls) call it a debt-to-income ratio.

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