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22 May, 05:23

What are some financial consequences that could happen to a borrower if he or she cannot pay back a car loan from a financial institution?

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  1. 22 May, 08:31
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    The bank can repossess the car and if anything is used as collateral they can claim that as well. It is best to not get yourself in debt you cannot pay off.

    One way to calculate debt is to figure out what your income is per week, and divide that by the weekly payments for the car. Lets say you make 3200, and your debt is 450 a week.

    As shown below

    Income : Payments

    3200 : 450 = 0.14

    Now multiply that by 100 to get your percentage,

    0.14 x 100 = %14

    Financial advisors recommend that you keep your debt-to-income ratio under 30%.
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