residual income refers to excess cash or disposable income. it is usually calculated on a monthly basis and reflects the amount of income that an individual or family has left over at the end of the month after all required payments are made. these include bills as well as mortgage payments and other large long-term debts. residual income is valuable in that it offers a snapshot of an individual's financial stability. for example, jame goes to the bank to apply for a loan. the bank ask jame to provide a record of how much she pays at each month in regular bills as well as credit card, car and mortgage payments. if her monthly income barely covers her basic bills and other payments, then she is unlikely to be approved for the loan. however, if jame can show that she is capable of paying her bills and still have savings at the end of the month, she will probably be granted the loan. residual income is a significant factor in loan offers, as banks want to ensure that a borrower has enough income after expenditures in order to pay back the debt since the bank could rest losing money.
- residual income・・・残余所得