How Much Can You Afford?

Calculate your maximum affordable loan based on your income and existing debts

Affordability Calculator

Income & Existing Debts

$

Your total monthly income before taxes

$

Car loans, credit cards, student loans, etc.

Loan Parameters

Safest option, recommended by most lenders

%

Annual percentage rate

Length of loan

Maximum Affordable Loan Amount
$14,787
with a monthly payment of $1,300

Budget Breakdown

10%
26%
64%
$0$5,000
Gross Monthly Income
$5,000
Max Debt Payment (36.0% DTI)
$1,800
Existing Debts
$500
Available for New Loan
$1,300
Remaining Income
$3,200

Debt-to-Income Ratio

10.0%
Current DTI
Excellent DTI Ratio
Excellent! You have plenty of room for additional debt.
Excellent
≤ 20%
Good
21% - 36%
Fair
37% - 43%
Poor
> 43%

Understanding Affordability

What is Debt-to-Income (DTI) Ratio?

DTI ratio is the percentage of your gross monthly income that goes toward paying debts. Lenders use this to assess your ability to manage monthly payments and repay borrowed money.

Why Does DTI Matter?

  • •Lenders use DTI to determine loan approval and interest rates
  • •Lower DTI = better loan terms and lower rates
  • •Most lenders prefer DTI below 36%, maximum 43%

How to Improve Your Affordability

  • ✓Pay down existing debts (credit cards, car loans)
  • ✓Increase your income through raises or side work
  • ✓Avoid taking on new debt before applying
  • ✓Consider a longer loan term to lower monthly payments

Tips for Better Loan Terms

  • →Improve your credit score before applying
  • →Shop around with multiple lenders
  • →Consider a co-signer if your DTI is high
  • →Save for a larger down payment to reduce loan amount

Disclaimer: This calculator provides estimates only. Actual loan amounts and terms depend on your credit score, employment history, lender requirements, and other factors. Consult with a financial advisor or lender for personalized advice.