Borrowing Capacity Calculator

This calculator estimates your borrowing capacity based on your annual income, monthly expenses, and existing debts.

Input Parameters

Calculation Results

Calculation Formula

Borrowing Capacity = (Annual Income / 12 - Monthly Expenses - Existing Monthly Debts) * 4

Where:
Annual Income: Your total annual income.
Monthly Expenses: Your monthly living expenses.
Existing Monthly Debts: Your existing monthly debt payments.
The factor of 4 is a common multiplier used to estimate borrowing capacity.

Your Borrowing Capacity (USD)

Borrowing Capacity Calculator Usage Guide

Learn how to use the Borrowing Capacity Calculator and its working principles

How to Use the Calculator

  1. Enter your annual income in the "Annual Income" field.
  2. Enter your monthly living expenses in the "Monthly Expenses" field.
  3. Enter your existing monthly debt payments in the "Existing Monthly Debts" field.
  4. Click the "Calculate" button to estimate your borrowing capacity.
  5. Your borrowing capacity will be displayed in the "Your Borrowing Capacity" field.

Understanding the Formula

The calculator uses the following formula to estimate borrowing capacity:

Borrowing Capacity = (Annual Income / 12 - Monthly Expenses - Existing Monthly Debts) * 4

This formula calculates your monthly disposable income after subtracting your expenses and existing debts, and then multiplies it by 4 to estimate your borrowing capacity. The factor of 4 is a common multiplier used in financial calculations.