Loan Affordability Calculator

Loan Affordability Calculator
Cash Lady

Presentation design explaining loan affordability calculator with a subheading of calculate if you can afford your loan

Why is it important to calculate affordability?

Before taking out an online loan it is important to make sure that the repayments are realistic. Your loan repayments should be fair and affordable.
 
Not doing so can get you into serious financial difficulty.

Our quick loan affordability calculator looks at the same questions that lenders should. This means you can see in advance how much you may be able to borrow. It also helps you work out what you can afford to pay back.

 

About our loan affordability calculator

Our loan affordability calculator works out how much you can afford to borrow. We have designed our calculator for customers with previous credit issues. These issues can include missed payments, county court judgments or defaults.

The questions in our calculator are the same as those used by our trusted panel of short-term lenders. This means you can apply for a short-term loan that lenders are likely to agree is affordable and fair. No nasty surprises.

Our calculator takes into account your income and expenditures. Your earnings are the money you have coming in, such as your wages. Your expenditures include regular payments such as:

  • Rent
  • Mortgage
  • Council tax
  • Other regular bills.

Our calculator then works out how much you can afford to repay each month.

loan affordability calculator presentation explaining how to calculate your income and expenditure

Calculating your disposable income

Your disposable income is the money left each month after paying your regular bills. This is the most important factor in borrowing money.

Disposable income is also a useful tool when budgeting and managing your finances. Borrowing more than your disposable income can get you into serious repayment trouble. By using our calculator, you can avoid this situation.

When using our loan affordability calculator, please be as accurate as possible. List your total income, including your wages and any benefits you are receiving.

Check your payslips or bank statements to get accurate figures. You should also include any extra income such as rent from lodgers or other financial help. When calculating your income, you should ignore one-off or irregular income.

Make sure your disposable income is enough to meet your payday loan repayments.

How to fill in the details

Use accurate figures for your expenditures. Check your bank statements for the average amounts.

If you have any costs that you pay for on an annual basis, you should divide the total by 12. Likewise, you should divide any quarterly payments by 4.

When calculating your outgoings, you should include:

  • Rent/Mortgage
  • Council tax
  • Utility bills such as gas, electric, water, council tax and phone bills
  • Transport costs such as car tax, car insurance, bus/train tickets
  • Food
  • Credit repayments such as loan payments, credit card bills etc.
  • Other expenses like clothes, beauty, entertainment, childcare.

These can often be tricky to define. Check back through several months’ bank statements as this can be an easy way to see what you actually spend.

A loan affordability calculator does not replace a credit check run by a credit company. This is a vital step in your application process.

Important! No credit check offers are not real, they work to show your probability of acquiring a real loan in the UK. Be cautious when looking for such offers.

If your outgoings total more than your income, then borrowing money may not be a wise decision

If your outgoings total more than your income, then borrowing money may not be a wise decision. This is especially true of short-term loans, which tend to have higher interest rates.

Borrowing money when in this situation can land you in severe difficulties.