The Finance AlgorithmTFA

Affordability Calculator

Calculator

Find out how much personal loan you can comfortably afford based on your income and expenses

Free to useNo data storedAI insightsUpdated: February 2026

Not sure how much personal loan you can afford? This calculator analyzes your financial situation to give you a realistic estimate of what you can comfortably borrow without overextending your budget.

Enter Your Details

Enter Your Details

$

Your total monthly income after tax

$

Your regular monthly expenses (rent, bills, food, etc.)

$

Monthly payments on existing loans and credit cards

%

Typical personal loan rates range from 7% to 15%

How long you'd like to repay the loan

Real-World Examples

Young Professional in Sydney

Emma earns $6,000/month and spends $3,500 on living expenses with a $200 credit card minimum payment.

Inputs:

income:6,000expenses:3,500existingDebt:200
With $2,300 disposable income, Emma can comfortably afford a $25,000-$30,000 personal loan over 5 years.

Family Planning a Renovation

The Smiths have $9,000 combined monthly income, $6,000 expenses, and an $800 car loan payment.

Inputs:

income:9,000expenses:6,000existingDebt:800
With $2,200 monthly surplus, they should limit new borrowing to $35,000 to maintain financial cushion.

Frequently Asked Questions

Glossary

Debt-to-Income Ratio (DTI)
The percentage of your monthly income that goes toward debt repayments. Lenders prefer this under 36%.
Disposable Income
Money left over after paying all necessary expenses. This determines your actual borrowing capacity.
Serviceability Buffer
Extra margin lenders add to ensure you can still repay if rates rise or expenses increase.
Net Income
Your take-home pay after tax and superannuation deductions.

Disclaimer: This calculator provides estimates based on your inputs and general lending criteria. Actual approval amounts vary by lender and depend on credit history, employment, and other factors. Always compare offers from multiple lenders.

Last updated: February 2026

How to Use
  1. Enter your total monthly income after tax
  2. Add your regular monthly expenses
  3. Include any existing loan or credit card repayments
  4. Set the expected interest rate and preferred term
  5. Click calculate to see your affordable borrowing amount
Key Information
  • Lenders typically want your debt-to-income ratio under 36%
  • Most lenders require a buffer of 30% above minimum expenses
  • Your credit score affects the rate you'll be offered
  • Secured loans may allow you to borrow more
Pro Tips
  • Aim to keep loan repayments under 20% of your net income for comfort
  • A shorter loan term means higher repayments but significantly less interest
  • Pay off high-interest credit cards before applying - it improves your borrowing power
  • Having 3+ months of emergency savings shows lenders financial responsibility
Avoid These Mistakes
  • Borrowing the maximum approved amount instead of what you actually need
  • Forgetting variable expenses like car repairs or medical costs
  • Not accounting for potential income changes or job security
  • Ignoring the impact of fees on total loan cost
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