Loan Affordability Calculator
Borrow within your means.
Loan Affordability Calculator
Max Loan = payment x [(1+r)^n - 1] / [r(1+r)^n]
Calculated instantly
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What This Calculator Does
The Loan Affordability Calculator estimates the maximum loan amount you can comfortably handle based on your income, existing debts, and desired monthly payment. It helps you set realistic borrowing limits before applying.
How It Works
Based on your monthly payment capacity and interest rate, the calculator determines the maximum principal you can borrow. Most financial advisors recommend keeping total debt payments under 36% of gross income.
Example
With $6,000 monthly income, $1,800 existing debt, and wanting to keep DTI at 36%, you can afford about $360/month for a new loan, giving you roughly $20,000 at 7% for 5 years.
Formula
Max Loan = payment x [(1+r)^n - 1] / [r(1+r)^n]Reading the Results
Max Monthly Payment
The most you should spend on a new loan each month, keeping DTI at 36%.
Max Loan Amount
The maximum you can borrow at the given rate and term.
Frequently Asked Questions
What is the 36% rule?
Financial advisors recommend keeping total monthly debt payments below 36% of gross income for healthy finances.
Can I borrow more than this?
Some lenders allow DTI up to 43-50%, but stretching your budget increases financial risk.
Does this include all debt?
Yes, include rent, car loans, student loans, credit cards, and any other recurring debt obligations.