Loan affordability calculator: how much loan can you afford?
Before applying for a loan, find a comfortable ceiling. This calculator turns your income and existing payments into a maximum instalment and the loan that supports.
How to use this calculator
- Enter your monthly take-home income.
- Enter the total of your current monthly loan payments.
- Choose the share of income you are willing to spend on all loans together.
- Enter an interest rate and term to see the loan size that instalment supports.
Worked examples
Example 1
₹1,00,000 take-home income, ₹10,000 of existing EMIs, 40% share, 9.5% for 15 years.
You enter
| Monthly take-home income | ₹1,00,000 |
|---|---|
| Existing monthly loan payments | ₹10,000 |
| Share of income you are willing to spend on all loans | 40% |
| Interest rate (per year) | 9.5% |
| Term (years) | 15 |
You get
| Room for a new monthly instalment | ₹30,000 |
|---|---|
| Loan this could support | ₹28,72,945 |
| Total interest over the term | ₹25,27,055 |
Example 2
A more cautious 30% share.
You enter
| Monthly take-home income | ₹1,00,000 |
|---|---|
| Existing monthly loan payments | ₹10,000 |
| Share of income you are willing to spend on all loans | 30% |
| Interest rate (per year) | 9.5% |
| Term (years) | 15 |
You get
| Room for a new monthly instalment | ₹20,000 |
|---|---|
| Loan this could support | ₹19,15,297 |
| Total interest over the term | ₹16,84,703 |
How it works
Lenders often cap total loan payments at roughly 40 to 50% of income. A lower share leaves room for emergencies, family needs and saving, so many planners suggest staying well below the lender's limit.
The result is a ceiling, not a target. Borrowing the maximum leaves little slack if income dips or rates rise.
Formula
Room for a new instalment = income x share - existing payments. Loan supported = instalment x (1 - (1 + i)^-n) / i.
Common questions
What counts as income?
Use steady monthly take-home pay. Leave out bonuses you cannot rely on.
Does it include a down payment?
No. It estimates the loan only; add your down payment to estimate the price you can afford.
Is this what the bank will lend?
No. Banks apply their own rules and checks.
Learn more
Read the lesson Understanding and managing debt on pusaram.com for the ideas behind this calculator.
Calculators give estimates for learning and planning. They are not financial, tax, legal or medical advice, and results depend entirely on the numbers you enter. Check rates, limits and rules with an official source or a qualified professional before acting.