Loan Affordability Calculator
Calculate how much you can afford to borrow based on your income, expenses, and debt-to-income ratio. Determine your maximum loan amount and monthly payment capacity.
- Loan Affordability Calculator: Calculate borrowing capacity
- Affordability Factors: What affects how much you can borrow
- Improving Affordability: Ways to increase borrowing capacity
Loan Affordability Calculator
Enter your financial information to determine how much you can afford to borrow.
Factors Affecting Loan Affordability
Income Considerations
- Gross vs. Net Income: Lenders typically use gross income
- Income Stability: Consistent employment history preferred
- Income Sources: Salary, bonuses, commissions, investments
- Future Income: Potential for income growth or decline
Debt-to-Income Ratio
- Front-End DTI: Housing payments only (typically ≤28%)
- Back-End DTI: All debt payments (typically ≤36-43%)
- Lender Variations: Different lenders have different limits
- Loan Type Impact: Some loans allow higher DTI ratios
Improving Your Loan Affordability
Increase Income
- Career Advancement: Seek promotions or higher-paying positions
- Side Income: Develop additional income streams
- Education/Skills: Invest in training to increase earning potential
- Co-Borrower: Add a co-borrower with income
Reduce Existing Debt
- Pay Down Balances: Reduce monthly debt payments
- Debt Consolidation: Combine debts for lower payments
- Avoid New Debt: Don't take on additional obligations
- Close Unused Accounts: Reduce available credit limits
Improve Credit Score
- Pay Bills On Time: Establish consistent payment history
- Reduce Credit Utilization: Keep balances low relative to limits
- Don't Close Old Accounts: Maintain credit history length
- Check Credit Reports: Dispute any errors or inaccuracies
Adjust Loan Terms
- Longer Terms: Lower monthly payments but more interest
- Larger Down Payment: Reduce loan amount needed
- Different Loan Types: Some programs have flexible requirements
- Shop Around: Different lenders have different criteria