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Personal loan calculator: How much can I borrow?
Find out how much you might be eligible to borrow based on your income and expenses.
Enter your information to learn your borrowing power — or how much you can afford to borrow — without impacting your credit score.
How to calculate your borrowing power
Follow these instructions to use our calculator to estimate your borrowing power — aka, how much you can afford to take on and you’re ability to repay:
- Enter the repayment term and rate that you expect to receive when you apply for a loan. You can experiment with these numbers to see which numbers best fit your budget.
- Select the type of application you plan on using: single if you’re applying alone or joint if you’re applying with someone else.
- Enter your income before taxes, as well as your joint applicants income, if applicable. Also add any additional income you receive annually, including income from rent. Make sure you select how often this income comes in.
- Add details about other debts, such as student or personal loans, car loans and credit card debt.
- Enter the number of people you count as a dependent on your income tax.
- Hit Calculate to see how much you can afford to borrow.
How lenders calculate loan amounts
Every lender has their own way of calculating your loan amount. But almost all rely heavily on your debt-to-income ratio, or DTI. It’s your income compared to your current debts, and it’s usually expressed as a percentage. Your DTI considers debts like car notes, credit card minimum monthly payments, student loan payments, and mortgage payments. Other expenses like entertainment, groceries and utilities aren’t included in this calculation — the key word here is debt, and not bills.
You can easily do this calculation yourself by adding up your monthly debt obligations and then dividing them by your gross monthly income (pre-tax income).
For example, say you made $8,000 gross each month and your monthly debt payments are $2,000. That’d be a DTI of 25%.
If you want to take on a personal loan with a monthly payment of $200, you would add that to your current expenses and determine your DTI to see if you fall within a lender’s requirements. Using the same example above, your new DTI would be around 27.5% with the personal loan factored in.
Most lenders prefer a DTI below 43%, but some have more flexible requirements and may allow between 45% to 50%.
How lenders calculate interest payments
Lenders typically use the simple interest formula to calculate your interest payments:
Principal (loan balance) x Daily interest rate x Number of days between repayments = Monthly interest payment
With simple interest, lenders only apply the interest rate to the loan balance. This means that your interest payments don’t factor in the interest that added up during the previous days, making it the least-expensive type of interest. Compound interest, which would factor in both your unpaid interest and loan balance, is more common with savings accounts.
Let’s take a look at an example to see how it works. If you had a loan balance of $10,000 at an 11% annual interest rate with monthly payments. Before you can use the simple interest formula, you need to calculate the daily interest rate by dividing 11% by 365. This gives you a daily rate of 0.00030136986%.
If you multiply $10,000 by the daily interest rate, you’d find that the daily interest costs about $3.01. This means that in a month with 30 days, you’d pay $90.41 in monthly interest or $93.42 in a month with 31 days.
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Factors that affect how much you can borrow
These factors can influence the loan amount you’re eligible for.
- Income. Lenders want to make sure you have regular, monthly income. Having a full-time job can help you qualify for a larger loan than a freelancer, even if the freelancer makes more money on average.
- Debts. You must have enough room in your monthly budget to afford loan repayments on the amount you want to borrow, plus interest.
- Credit score. The highest loan amounts require excellent credit. You typically need a score of 760 or higher to qualify for the highest loan amount, according to experts. You typically need a 670 credit score to get a loan.
- Available loan amounts. Typically, most lenders offer personal loans up to $50,000 — although you can find loans up to $100,000.
Other factors like your level of education and career can also affect the amount you’re able to qualify for, depending on the lender.
3 ways to qualify for a larger loan
To make the most out of your loan, take the time to strengthen your application and consider these three tactics to qualify for more.
- Go for a longer term. Long terms reduce your monthly loan cost. But watch out — this can make your loan more expensive.
- Apply with a cosigner. Lenders sometimes consider your combined income with a cosigner or coborrower — especially if they’re your spouse. If your lender only considers one income, a cosigner that has a higher income can still help you qualify for more.
- Pay off your debts. Paying off credit card debt and student loans to lower your DTI and increase your credit score, which both help you qualify for a higher loan amount.
Next steps
Now that you know how much you can afford to borrow, take these steps to get a loan
- Compare. Look for lenders that offer loan amounts in your range that you can qualify for. Look at factors like rates, terms and the lender’s reputation.
- Prequalify. After you’ve narrowed down your choices, fill out a prequalification form on the lender’s website. This will give you an estimate of the rates, terms and loan amounts you might receive if you applied without affecting your credit.
- Apply. Once you find an offer you like, follow the lender’s directions to complete the rest of the application and submit documents, such as bank statements and recent pay stubs.
- Repay. Most personal loans come with a monthly repayment, which is based on your loan amount, interest rate and terms.
Borrowing power definitions
When you’re applying for a loan, it’s important to know these terms so you know what you’re getting into.
Loan details
- Term. How long you have to pay back your loan. This calculator asks for a loan term in years.
- Interest rate. The cost of borrowing money. It can be either variable or fixed, and most lenders use simple interest to determine how much you owe.
- Application type. This refers to how many people are signing for the loan.
Income
- Gross income. Pre-tax income. If you recieve pay stubs, you’ll see gross income and net income.
- Untaxed income. Funds you regularly receive that you don’t need to pay taxes on. For example, pensions, Social Security, disability and child support all count as untaxed income.
- Rental income. This is any amount you earn from renting out an apartment, home or any other personal property, before taxes.
Expenses
- Other loans. The amount of any loans in your name, like personal loans and student loans, but not car notes.
- Car loan repayments per month. If you owe money on your car loan, this refers to your monthly loan repayment.
- Total credit card limit. The credit limit on each credit card in your name, added up.
- Number of dependents. The number of people you declare as a dependent on your taxes.
Results
- 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.
- 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.
Bottom line
This calculator is a good starting point to figure out how much you could afford to borrow and how much lenders might approve you for. Keep in mind that your credit score is a big factor in your eligibility as well. And when you’re ready to apply for a personal loan, compare some of the best personal loan options.
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Ask an Expert
In the past 3 months, started to establish credit. I have 2 credit cards one is secured for 400. One is unsecured for 300. I am an authorized user on my father’s unsecured credit card, for 300. So I have 1000 credit available. My credit score is a 613 on creditsesame and a 609 on creditwise. I am curious of my odds of getting a loan for 10000 to buy a car or two.
Hi Brian,
Thank you for getting in touch with Finder.
Please note that while the eligibility requirements for a car loan vary by lender, you generally need to meet the following criteria:
-At least 18 years.
-US citizen or permanent resident.
-Good credit history.
-Steady source of income.
I suggest that you also contact your chosen bank/lender to know your chances of being approved as well as reading relevant T&Cs or PDS of the loan products before making a decision and consider whether the product is right for you.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
i need 50000 in cash for a mobile home purchase for my daughter with terrible credit…i have excellent credit and do not want to take out a home equity loan on my own…any ideas on getting a loan with the lowest interest rate….
Hi Aaron,
Thank you for reaching out to Finder.
Apart from taking out a personal loan you may also want to check on being a cosigner instead for the loan that your daughter may take out. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!
Cheers,
Reggie
I have two high-interest loans that I pay $1010 together a month. I’m not late and I pay 100% on time.
I want to borrow $33,000 to pay both off and just have 1 payment at a lower interest rate but not a single lender I’ve checked will not help me. Why? My credit score is 743.
Hi JS1959,
Thanks for getting in touch with Finder. I’m sorry to hear about the trouble you are having.
There are a few things that might prevent your loan application from getting approved. It could be because you have insufficient income, you provided wrong information, you hold too many loans, or you are trying to borrow too much money. Addressing any of these reasons could increase your chance of getting approved.
Moreover, you might also try using an asset as security or ask someone to be your guarantor. Before you apply for another loan, check their minimum income requirement and credit requirements.
I highly recommend that you learn more about the most common reasons personal loans aren’t approved as well as how to avoid your personal loan being rejected.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua