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. |
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Investopedia explains '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. |
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