Loan Affordability Calculator
Calculate how much you can afford to borrow based on your target monthly installment.
Calculation Inputs & Parameters
500
(Default)
7.5
(Default)
5
(Default)
Maximum Loan You Can Afford
$24,953
Total Repayment
$30,000
Total Interest
$5,047
Payments Count
60 monthly installments
How the Calculation Works
Inverts the amortization formula to solve for principal from monthly payment.
Formula: Principal = Payment × [ (1 + r)^n - 1 ] / [ r(1 + r)^n ]
Practical Worked Example
Given Inputs: 500/mo budget | 7% | 5 Yrs
Calculated Output: Afford: ~25,248 loan
- Compute present value of 60 monthly payments at 7% APR.