Loan Affordability
How lenders determine how much you can borrow
What is loan affordability?
Loan affordability refers to the maximum loan amount a borrower can reasonably repay based on income, expenses, existing debts, and interest rates.
Key factors that affect affordability
Lenders evaluate income stability, monthly expenses, current debt obligations, credit history, and interest rates to assess borrowing capacity.
Debt-to-income ratio
The debt-to-income ratio (DTI) measures how much of your income goes toward debt payments. Lower ratios indicate stronger affordability.
Why affordability matters
Borrowing within your limits reduces financial stress, increases approval chances, and supports long-term financial stability.
To understand how lenders evaluate borrowing capacity, read our Loan Affordability guide.
How to improve loan affordability
Reducing expenses, increasing income, paying down existing debt, and improving credit scores all increase borrowing capacity.