The sum total of all the money you owe is what's commonly known as your debt load. To determine whether your load is more than you can afford, you'll want to calculate your debt/income ratio by comparing the amount you owe to the amount you earn.
Follow these four simple steps:
Debt/Income Ratio Guide
A debt/income ratio of 10 percent or less means that your finances are exceptionally healthy and within a range of 10 to 20 percent represents good credit, but at 20 percent or above, it's time to assess your debt load. Creditors will be less likely to give a loan to someone with such a high debt/income ratio and creditors that do tend to charge higher interest rates.
Another way to gauge your financial health is to calculate your net worth, which is the total value of your personal finances.
Assets - Everything that you own, which may include your house, car, furniture - anything that's worth money.
Liabilities - Everything that you owe, which may include your mortgage, credit card balance, interest, student loans and loans from family and friends.
Assets - Liabilities = Net Worth
Though one size doesn't fit all when it comes to debt, there are two main ways to successfully manage paying your loans. Consider the implications of your financial situation before choosing a method - then stick with it.