Recurring Debt


DEFINITION of 'Recurring Debt'

Any payment used to service a debt obligation that occurs on a continuing basis. Recurring debt involves payments that cannot be easily canceled at the payer's request, including alimony or child support, and loan payments.

BREAKING DOWN 'Recurring Debt'

Certain bills, such subscriptions, do not count as recurring debts because these payments can be terminated.

An individual's recurring debt is a strong factor when deciding how much of a mortgage loan he or she may obtain. Used in the debt-to-income ratio, lenders compare a borrower's income to the current amount of debt service payments. The concept behind this practice is to determine whether enough income remains, after accounting for recurring debts, to satisfy a mortgage payment.

  1. Debt-To-Income Ratio - DTI

    A personal finance measure that compares an individual's debt ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Alimony

    Payments made to a spouse or former spouse under a separation ...
  4. Total Debt Service Ratio - TDS

    A debt service measure that financial lenders use as a rule of ...
  5. Household Income

    The combined gross income of all the members of a household who ...
  6. Debt Service

    The cash that is required for a particular time period to cover ...
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