The 20–10 Rule for Borrowing Limit
| $ Total of | Should Be LESS Than | of Your |
| Amount Borrowed* | 20% | Annual Net Income |
| Monthly Payments | 10% | Monthly Net Income |
Directions:
- Use the 20-10 Rule to calculate the debt limits for Mariah’s and Jesse’s older siblings.
- If you earn any income now, also compute your debt limits.
| Borrower | Annual Net Income | Maximum Total Debt (20% Annual Net Income) | Maximum Monthly Payments (10% Monthly Net Income) |
| Mariah’s sister | $6,500 | ||
| Jesse’s brother | $24,750 | ||
| Jesse’s sister | $35,800 |