Loan Eligibility Calculator
Interactive StudioEstimate maximum loan borrowing power based on monthly income, existing debt commitments, and DTI caps in 160+ currencies. Instant feedback with zero server storage.
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About Loan Eligibility Calculator
Lenders typically cap how much of your monthly income can go toward loan repayments (often 40-50% of gross income). This calculator determines your available monthly repayment headroom and calculates the maximum loan principal you can qualify for.
How to use Loan Eligibility Calculator
- Enter your gross monthly income and your existing monthly loan repayments.
- Enter the interest rate and the loan term in years.
- Set the maximum share of income lenders allow for repayments.
- Read your monthly headroom and the largest loan that fits within it.
Worked examples
Input: Income 5,000 a month, existing payments 500, cap 40%, rate 9%, 15 years
Result: Total allowed payments 2,000, so headroom is 1,500 a month. The maximum loan is about 147,890.
Input: Same income but existing payments of 2,000
Result: No headroom is left, so the eligible amount is zero.
Background
Lenders use a debt-to-income (DTI) ratio: total monthly debt payments divided by gross monthly income. Many lenders cap it around 40-50%.
The maximum principal is the present value of the available monthly payment: P = EMI x ((1 + r)^n - 1) / (r x (1 + r)^n), where r is the monthly rate and n the number of months. This is an estimate. Real approval also depends on credit score, employment history, collateral and lender policy.
Common mistakes
- Treating the result as an approval. Lenders also weigh credit history and employment.
- Leaving out credit card minimums and other regular debts.
- Using net income when the lender's cap applies to gross income.
Frequently Asked Questions
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