What can high levels of debt impact negatively?

High levels of debt can significantly impact the likelihood of being approved for loans. Lenders typically assess an individual's debt-to-income ratio, which compares monthly debt payments to gross monthly income. A high level of debt raises this ratio, suggesting to lenders that the borrower may struggle to make additional payments, thus increasing the perceived risk. Consequently, individuals with substantial debt may face difficulty securing new loans or may only qualify for loans with higher interest rates or less favorable terms due to the higher risk associated with their financial situation.

While high debt may also affect savings, income, and asset value in various ways, the direct influence on loan approvals is a key concern for anyone looking to take on new debt, making option B the most relevant in this context.