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Personal loan calculator: How much can I borrow?
Use this personal loan affordability calculator to find out how much you can borrow.
How do I use this personal loan affordability calculator?
Follow these steps to fill out the fields in the calculator. If a field doesn’t apply to you — you’re not a landlord or don’t have a car loan, for example — leave that section blank.
- Under Loan Details, select the amount of time you have to pay back the loan next to Term.
- Enter an interest rate or annual percentage rate (APR) you think you can qualify for next to Interest rate.
- Next to Application type, select Single if you’re looking to apply on your own or Joint if you’re planning on applying for a loan with a cosigner, co-applicant or joint applicant.
- Under Income, enter the amount you earn before taxes per year, month, twice a week or every two weeks next to Gross Income 1. Select Annually if you used your yearly salary or Monthly if you entered your monthly salary. If you wrote the amount you earn each pay period, select Twice Monthly or Biweekly, depending on how often your employer pays you.
- If you’re applying with another person, enter their pretax income next to Gross Income 2. Then select how often they earn this amount.
- Write the amount of income you earn that you don’t have to pay taxes on next to Untaxed Income. Select how often you receive this amount.
- If you earn money from renting property, enter the amount you earn from your tenants before taxes next to Rental Income. Select how often you receive this amount.
- Under Expenses, enter the total loan repayments you and your joint applicant pay on any personal loan except for car loans next to Other loans. Select Monthly if you make one payment a month, Twice Monthly if you make two payments a month or Weekly if you make one payment each week.
- Write the amount you and your joint applicant pay on your car loans each month next to Car loan repayments per month.
- Enter the combined limit of all credit cards in your and your joint applicant’s name next to Total credit card limit.
- Enter the number of people you and your joint applicant count as a dependent on your taxes next to Number of dependents.
- Hit Calculate.
The results from the personal loan calculator show how much you may be eligible to borrow, what your monthly repayments would be based on the term and interest rate you filled in and how much you’d pay total in interest over the life of your loan.
- Monthly repayments. How much you could potentially pay each month if you took out a loan of the amount you might qualify for with rates and terms you entered under Loan Details.
- Total interest payable. The amount you’d pay in interest on your loan. If you entered an APR, this is your total loan cost including interest and fees.
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How big of a personal loan can I get?
How big of a loan you can get depends on which lender you go with and your personal finances. Some lenders only offer personal loans up to $10,000, while others, such as online brokers, can offer personal loans with a maximum loan amount of $50,000. Some banks can offer more – CIBC, for example, can lend up to $200,000.
Even if a lender can offer $50,000 or more, you might not be eligible for that amount. How much you can borrow depends on several factors, including your:
- Credit score. Borrowers with good to excellent credit (above 660) will have better chances of getting a high loan amount.
- Income. A high income suggests that you have the means to pay back the loan.
- Current debts. If you already have a significant amount of debt compared to your monthly income, a lender may see you as more of a liability and may be less likely to lend you a large amount of money.
If you have bad credit, you still have personal loan options. Banks may be out of reach for you, but online lenders can offer personal loans for bad credit. To figure out much you can realistically afford to borrow, you’ll need to take into account how much you actually need, as well as your income and your ability to make repayments. You’ll also need to consider any repayments you’re already making toward current debts.
How can I qualify for the maximum amount offered?
There are no guarantees you’ll be approved for the loan amount you’re seeking. However, these tips may help you score the amount you need.
- Improve your credit. A higher credit score will generally translate to better loan terms. If you’re after a large amount of money, a good or excellent credit score may get you the loan you want.
- Lower your debt-to-income ratio (DTI). Paying down your existing debts will lower your expenses, increase your credit score and show that you can afford to take out a larger loan. Keep your DTI below 40%. Calculate your DTI.
- Wait until you have established employment. Having a secure source of income, especially if it’s with a distinguished employer, can help show lenders you’re able to pay for your loan.
- Look into a secured loan. If you have the collateral available, especially if you own a home, you may be able to borrow a secured loan and get approved for a larger amount, with a possible lower interest rate. This is because lenders have less risk should you default, since they will seize your collateral.
What information do I need to provide lenders?
When you submit an application, lenders take into account a few different pieces of information in order to determine if you qualify for the loan amount you’re requesting. These can include:
- Your loan purpose. Many lenders will ask what you plan to use the loan for. Be honest, as this could impact your loan contract and the interest rate you’re offered in addition to your loan amount.
- Your address. You will need to provide your home address.
- Rent or own. You will need to state whether you rent or own you home, plus how long you’ve lived there.
- Your monthly expenses. You will need to provide information about your monthly costs, such as car payments, credit card payments and house payments.
- Credit score. While your credit score isn’t the only deciding factor, it does carry a lot of weight. The better your credit score, the more likely a lender will be to approve you for the maximum loan amount.
- Your employment information. Lenders will want to know where you work, how long you’ve been working for that company and how much you earn.
- Your age. In order to qualify for a loan, you will need to be at least 18 (19 in some provinces).
- Canadian citizen or resident. If you are not a Canadian citizen or resident, your options are limited as most lenders require this.
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Avoid borrowing more than you need
If you’re approved for a personal loan, your lender will provide you with the maximum amount you can borrow. Although you can take out this amount — and may have to, depending on your project — this might not be the smartest move.
That’s because the more you borrow, the more you’ll pay in interest and fees. If you don’t even need to borrow as much as you’re being offered, to save on loan costs, ask your lender if you can borrow less before signing your loan documents.
The maximum amount available for a personal loan and the maximum amount you can borrow will vary depending on the lender and your financial situation. Find the right lender and see how much you’re eligible to borrow as well as what types of rates you may be offered. If it matches with your budget, you may be on your way to financing that next big purchase in your life.
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