MyWebUtils: Free Online Dev Tools

Loan Affordability Calculator
Estimate the maximum loan amount you can afford based on your income and expenses. Assumes up to 40% of disposable income for EMI.
Enter your financial details to estimate loan affordability.
Understanding Loan Affordability

What Does "Loan Affordability" Mean?

Loan affordability is an estimation of how much you can comfortably borrow from a financial institution. Lenders use various metrics to determine this, but a key factor is your disposable income—the money you have left after paying your monthly expenses. This calculator helps you get a quick estimate of your borrowing power.

How This Calculator Works

This tool uses a common financial rule of thumb to estimate your maximum loan amount:

  • Disposable Income: It first calculates your disposable income by subtracting your monthly expenses from your monthly income.
  • Affordable EMI: It then assumes that you can comfortably allocate a certain percentage of your disposable income towards a monthly loan payment (EMI). This tool uses a standard assumption of 40%, but this can vary by lender.
  • Maximum Loan Amount: Based on this "affordable EMI," the interest rate, and the loan tenure you provide, it reverse-calculates the maximum principal loan amount you could likely qualify for.

Why Is This Important?

Before you start shopping for a home, car, or applying for a personal loan, it's crucial to know what you can realistically afford. This calculator gives you a ballpark figure, helping you set realistic expectations and approach lenders with more confidence. It prevents you from over-leveraging yourself financially and ensures your loan payments don't strain your budget.

Disclaimer: This is a simplified estimation. Lenders consider many other factors, including your credit score, employment stability, and existing debts. The final loan amount approved may be different.