Borrowing Power Calculator

Exactly how much can you afford to borrow from a bank that your payments will still be affordable AND that you have a 100% chance of being approved for? Every hard inquiry into your credit history that doesn’t result in an offer simply lowers your probability of success later on. Don’t waste your chances. Let us help! Our free calculator factors in your income and expenses to give you a precise figure for how much the bank will approve for you without endangering your budget or credit score. In other countries this tool may be known as a “borrowing capacity calculator” or “loan borrowing calculator”. No matter what you call it, it serves the same purpose.

Why should you run a calc before you apply? When you apply for a loan from a bank, the lender performs a hard check on your credit score. If you’ve applied for too much, they’ll reject your loan. Repeated loan rejections harm your credit score and down the road you may never be able to borrow what you can comfortably afford today – simply because of your credit score. Banks aren’t just giving away money. They need to ensure that you can pay the debt back on time. Your creditworthiness is determined by comparing how much money you receive each month versus how much you owe across all existing accounts. Within the banking industry this is known as your debt-to-income ratio. This is the percentage of how much you owe every month compared to how much money you make every month. If more than 40-50% of your income is going towards your loan payments the bank will most likely deny you for a new loan or offer you a higher interest rate. A debt-to-income ratio of up to 30% is ideal. If you have a salary with commissions, do not input your maximum yearly income into the affordability calculator. Use the average figure—or better yet, just your guaranteed base salary. Bonuses may be delayed, but you must make your loan payments to the bank strictly on schedule.