How much credit can I get? Now read how to figure out how much house you can afford. “Ideally, you should see how much money they actually have left at the end of the month,” advises the expert. Once again, banks and real estate lobby get their advertising.
How much credit can I buy?
Above all, due to the extremely low interest on loans, more and more consumers are seizing the opportunity to underpin future consumer spending with a corresponding lending business. However, most borrowers do not think much or nothing about whether they can afford the loan business at all. For example, in the rarest of exceptions, a revenue and expense account is maintained to determine which available capital is available.
However, this free result is an important indicator, because only if it is available on a certain scale, you can pay off the repayment of a loan. In the following guide, we would like to explain to you how you can determine whether you can afford a loan and what the potential loan amount would be. “How much credit can I spare myself?
“This problem does not occur to most borrowers at all, as it is usually the case that they already have some loan amount in mind, which is usually the (” consumer “) expense you pay with This takeover bid, for its part, has a certain price, which usually dictates the need for credit after deducting the available funds.
This or similar is the case with almost all consumer wishes that are to be financed by a loan. But in some cases, it is also possible for you to be mobile in terms of the loan amount. It is then really logical to first determine whether you can afford the loan at all and, above all, what maximum amount would be possible.
This can be the case, for example, if you have not yet decided on a specific vehicle, but are variable in terms of type and make. There are two questions to answer, namely whether you can afford a loan at all and in a second step, how high the loan amount can be.
Can I usually borrow a loan?
Regardless of the type of consumption that you want to refinance with a loan, there are always some conditions that must also be taken into account when comparing bids, namely: Loans with credit-based interest rates are currently in demand, especially from banks. However, these have the advantage for you that they are difficult to integrate into a credit rating comparison.
As a rule, only one bandwidth is displayed, eg an interest rate of 3.99 to 8.99 percentage points depending on the creditworthiness of the appropriate takeover bid. What matters, however, is how to determine as quickly and reliably as possible whether you can generally afford a loan. The easiest way is to set up a so-called income and expenditure account.
In the Revenue and Expense Calculation, you simply proceed to keep a record of all ongoing costs incurred once a quarter. However, it is equally important to reduce the running costs to one calendar month and thus to include them in the installation, which can only take place once a year.
One of the most common regular costs that would likely appear in your income statement: All expenses incurred by you in this way / further should be reflected in the income and expense account. Then you compare the total expenditure with the current salary. This will primarily be your monthly income.
The profit and loss account serves to calculate your free assets. This is only possible if all regular costs are less than your monthly income. If z. For example, if the income and expense account has a positive stock of $ 300, you can in principle borrow a loan with a maximum loan of $ 300.
However, it is not advisable to take full advantage of the available money. Rather, experts recommend that a maximum of 60 to 70 percentage points of the available capital be set as loan interest. Because it can always come back to unforeseen expenses, which sometimes become an economic disadvantage.
What loan amount can I pay off?
After determining the monthly disposable income based on the income and expenditure account, the question – as already mentioned in the introduction – can then be how much credit, ie what loan amount you can still afford. In order to answer this question, receipts and outgoing accounts are definitely essential information.
For the determination of the possible loan amount you need a size: the highest possible monthly installments! In return, you can only determine this if you know your disposable income. However, to determine the maximum loan amount that you can afford, you not only have to pay the maximum loan rate per calendar month, but also the interest estimated by the house bank.
Using these two examples below, we want to illustrate how you can determine the loan amount that you can afford with very little effort: Example 1: Example 2: As you can see from these two example calculations, the deadline is for each Loan a size that allows you to control the highest possible loan amount.
For the two exemplary cases, we assumed a maximum repayment period of 60 or 72 months. However, if you have decided to repay the loan as soon as possible, for example within 24 months, the maximum loan amount will of course also be reduced. Then your monthly fee will be significantly higher, so you may not be able to afford a loan of USD 17,500, but with a period of 36 months in the first example, the maximum amount of the loan could only be around USD 10,000.
Anyone who wants to solve the problem of the loan itself, can not help but determine his monthly free earned income. With revenue and expenditure accounts this is relatively quick and easy. The calculated monthly surpluses that are available to you for free use are also the maximum possible credit installment.