How affordability is worked out
The repayment comes from the amount, APR and term, using the monthly rate UK lenders use. The calculator takes it, your existing credit repayments and your essential spending away from your take-home pay. What's left is your spare money each month.
UK lenders must check that you can repay without real financial difficulty (FCA CONC 5.2A). They look at income and spending in much the same way, though each sets its own rules.
Worked example
A £10,000 loan at 8% APR over 5 years costs £201.43 a month. With £2,600 take-home pay, £150 of credit repayments and £1,500 of essential spending, you'd have £748.57 left each month. Credit would take 13.52% of your pay.
How much spare money is enough?
There's no single rule. Keep enough spare for one-off costs like car repairs, and don't count on overtime or bonuses. If you'd be short, try a smaller loan or a longer term.
What this calculator assumes
A fixed APR and equal monthly repayments. It doesn't run a credit check, and a lender may still decline you or offer a different rate.
How much could you borrow?
This page checks one loan. To find the most you could borrow from your budget, work the other way round.
For the biggest loan your budget allows, use the UK loan eligibility calculator.
Borrowing in the US?
The country choices above the inputs open separate local pages. US lenders judge affordability by your debt-to-income ratio from gross income instead. Choosing United States opens that page and resets the inputs; amounts are not converted.
For a US loan, use the US loan affordability calculator in US dollars.
Inputs for the UK loan affordability calculator
Loan amount
The loan you're thinking of taking, in pounds.
APR
The APR on your quote. We turn it into a monthly rate the way UK lenders do.
Term
How long you'd take to repay, in years.
Monthly take-home pay
What reaches your bank after tax, National Insurance and pension.
Existing credit repayments
What you pay each month on loans, cards and car finance.
Essential monthly spending
Rent or mortgage, bills, council tax, food, travel and childcare.
CALCULATOR QUESTIONS
UK loan affordability calculator questions
How do I know if I can afford a loan?
Take your essential spending, existing credit and the new repayment away from your take-home pay. If there's money left over for surprises, the loan is likely affordable.
What share of my income should go on loans?
There's no official limit in the UK. Many guides suggest keeping unsecured credit to well under a fifth of take-home pay.
Will a lender agree with this result?
Not necessarily. Lenders also look at your credit file, job and their own rules.
What if I can't afford the repayment?
Borrow less, choose a longer term (which costs more interest), or wait until you've cleared other debts.