Loan Affordability Calculator
Find out how much you can borrow based on your income, debts, and target DTI
Get your rate in minutes
No credit score impact
Borrow up to $500,000+
Loan Affordability Calculator
How Much Can You Afford to Borrow?
Maximum loan is based on the payment you can afford at the target DTI, reverse-calculated using the amortization formula. Actual approval depends on credit score, income verification, and lender-specific criteria.
Key Takeaways
- A person earning $5,000/month with $1,600 in existing debt payments can afford approximately $7,200 in new personal loan borrowing at 12.26% APR for 36 months while staying at the 36% DTI guideline.
- The affordable loan amount changes dramatically with the term: at the same rate and budget, a 60-month term lets you borrow about $11,200 versus $7,200 for 36 months — though you pay more total interest.
- The Rate × Term matrix shows your maximum affordable loan at 30 different combinations of APR and term, making it easy to see how a lower rate or longer term expands your borrowing capacity.
- The budget breakdown bar shows what percentage of your income goes to housing, existing debts, the new loan, and what remains for living expenses. If the remaining slice is too small, reduce the loan target.
- DTI above 36% is technically possible at many lenders (some accept up to 50%), but staying under 36% gives you the widest range of lender options and the best rates.
How to Use This Calculator
This calculator works backwards from your budget to answer “How much can I borrow?” instead of “How much will this loan cost?” It uses your income, existing debts, and a target DTI to find the maximum loan amount you can comfortably afford.
Step 1 — Enter your gross monthly income. This is your pre-tax income. Include all regular sources: salary, freelance, rental income, Social Security. If applying with a co-borrower, combine both incomes.
Step 2 — Enter existing monthly debts. Housing payment (rent or mortgage including taxes/insurance) goes in the first field. All other debt payments (auto, student, cards, other loans) go in the second. Only include minimum required payments — not discretionary spending.
Step 3 — Set loan parameters. Enter the APR you expect to qualify for (default is the 12.26% national average), choose a term, and set your target DTI. The 36% default is the standard financial guideline. Sliding it higher shows you can borrow more, but the category indicator warns you when you cross lender comfort zones.
Step 4 — Explore the matrix. The Rate × Term matrix shows your affordable loan at 30 different combinations. If your quoted rate is different from the default, find your rate row and your preferred term column — the intersection is your maximum loan. Green highlighting marks the closest match to your current settings.
Understanding the Results
The hero number is the maximum loan amount that keeps your total DTI at or below the target. It is calculated by determining the maximum monthly payment available (income × target DTI − existing debts), then reverse-solving the amortization formula to find the loan principal that produces that payment at the given rate and term.
The budget breakdown bar gives an immediate visual reality check. If your housing, debts, and new loan payment consume 50%+ of your income, the remaining slice for food, transportation, utilities, and savings may be uncomfortably thin. Financial advisors generally recommend keeping total fixed obligations (including the new loan) under 50% of gross income, with 36% being the ideal ceiling for just debt payments.
The Rate × Term matrix is the power feature. It reveals two key relationships: longer terms dramatically increase affordable amounts (but increase total interest), and lower rates increase affordable amounts modestly. A borrower with a $200/month payment budget can borrow $5,300 at 18% for 36 months, but $9,500 at 10% for 60 months — nearly double.
DTI Guidelines by Lender Type
| Lender Type | Max DTI | Max Loan Payment ($5K income) | Notes |
|---|---|---|---|
| Conservative (PrimeRates guideline) | 36% | $200 | Best rates, most lender options |
| Standard (most PL lenders) | 40%–43% | $400–$550 | Still approved at most lenders |
| Flexible (SoFi, Prosper, Upgrade) | 50% | $900 | Higher risk tier, may face higher rates |
| FHA Mortgage (for reference) | 43%–57% | — | Mortgage-specific, not personal loans |
Payment amounts assume $5,000 gross monthly income with $1,600 in existing debts. Your results differ based on income and existing obligations.
Frequently Asked Questions
How much personal loan can I afford?
It depends on your income, existing debts, the loan rate, and term. At $5,000/month income with $1,600 in existing debts and a 36% DTI target, you can afford approximately $7,200 at 12.26% for 36 months. Enter your actual numbers above for a personalized result. The Rate × Term matrix shows how the affordable amount changes across 30 different scenarios.
What DTI should I target?
36% or lower is the standard financial guideline for total debt payments (including the new loan) relative to gross income. Staying at or below 36% gives you the widest range of lender options and the most competitive rates. Many lenders approve up to 43%–50%, but rates may be higher and the budget strain is greater.
Does the calculator account for taxes?
The calculator uses gross (pre-tax) income, which is the standard lenders use for DTI calculations. However, your actual take-home pay is 20%–35% lower after taxes. The budget breakdown bar is based on gross income. For a more realistic picture of what you can truly afford, consider that the “remaining” portion needs to cover taxes as well as living expenses.
Should I extend the term to borrow more?
Extending the term lowers the monthly payment and increases the affordable loan amount, but you pay significantly more in total interest. A $10,000 loan at 12% costs $1,957 in interest over 36 months but $3,347 over 60 months. Borrow for the shortest term that keeps the payment comfortable. Use our Personal Loan Calculator to compare the total cost at different terms.
What if my existing debts are too high?
If the calculator shows $0 affordable loan, your existing debt payments already exceed the target DTI threshold. Options: pay down existing debts first, increase income, or raise the DTI target (understanding the higher risk). Consolidating existing high-interest debts into a lower-rate loan can also free up capacity — see our Debt Consolidation Calculator.
How does the Rate × Term matrix work?
The matrix shows the maximum affordable loan at 6 different APRs (8%–22%) across 5 different terms (24–84 months). Your current settings are highlighted in green. Reading across a row shows how the term affects affordability at a constant rate. Reading down a column shows how the rate affects affordability at a constant term. This helps you prioritize: should you shop for a lower rate or accept a longer term?
References & Further Reading
- CFPB — What Is Debt-to-Income Ratio?
- Federal Reserve G.19 — Consumer Credit
- CFPB — What Is a Personal Loan?
Keep Reading
- DTI Calculator — Detailed debt-to-income analysis with lender matching
- Personal Loan Calculator — Full payment and amortization for a specific loan
- Credit Score Simulator — Improve your score to qualify for better rates
- How to Prequalify — Check rates without affecting your score
- Best Personal Loans — Compare lenders
- All PrimeRates Calculators