Loan Affordability Calculator
Find the loan a monthly payment can support.
Results update as you type.
How it works
The maximum loan amount shown here is the largest sum you could borrow while keeping the monthly payment within a figure you choose, given the interest rate and the length of the loan. It matters because lenders and buyers alike tend to think in monthly payments, yet the headline decision is how much total debt to take on, so working backward from an affordable payment keeps borrowing grounded in what your budget can actually sustain. This loan affordability calculator converts the annual rate to a monthly rate, then reverses the standard amortization formula to find the present value of your payment stream — that present value is the loan such a payment can repay over the term. Reversing the amortization math is the correct approach because it is the exact calculation a lender performs to set a payment, so the loan it returns is one that genuinely amortizes to zero at those terms. Borrowers use a loan affordability calculator to set a ceiling before applying, to see how the rate and term stretch or shrink their borrowing power, and to compare offers. Keep in mind the result is the loan principal only: fees, insurance and other costs sit on top, and a payment a lender approves is not always one that fits comfortably alongside your other commitments.
Loan = payment × (1 − (1 + r)^−N) ÷ r, r = rate ÷ 1200, N = years × 12
The monthly rate r is the annual rate divided by 1200, and N is the number of monthly payments, or years times twelve. The loan a payment supports is the present value of that payment stream: payment × (1 − (1 + r)^−N) ÷ r, which discounts every future payment back to today's dollars and sums them. When the rate is zero the formula collapses to payment × N, since there is no interest to discount. A larger payment, a lower rate or a longer term each raises the loan the same budget can support.
Source:Consumer Financial Protection Bureau (CFPB)
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter monthly payment, annual interest rate and loan term.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Maximum loan amount updates instantly as you type — no button to press.
Frequently asked questions
How is the maximum loan amount calculated?
The tool takes the payment you can afford and works out the loan whose scheduled payments exactly match it over the term. It converts your annual rate to a monthly rate, then computes the present value of your payment stream — the sum of every future payment discounted back to today. That present value is the largest loan your payment can fully repay, which is the same math a lender uses when sizing a payment to a loan.
Should I borrow the maximum the tool shows?
Not necessarily. The figure is the largest loan a given payment supports, not a recommendation. A payment that is technically affordable can still leave little room for emergencies, savings or a change in income. Financial planners generally advise borrowing below your maximum and keeping total debt payments to a modest share of income, so aim for a payment that fits comfortably alongside your other bills rather than the highest one you can technically manage.
How does the loan term change how much I can borrow?
A longer term spreads the balance over more payments, so each payment is smaller and the same monthly budget supports a larger loan. The trade-off is that a longer term means more total interest paid over the life of the loan, even though the monthly figure looks easier. Shorter terms restrict how much you can borrow for a given payment but cost far less in interest overall, so weigh the larger balance against the added cost.
Does this include taxes, insurance and fees?
No. The result is the loan principal only — the amount you borrow and repay with interest. For a mortgage or auto loan, additional costs such as property taxes, insurance, origination fees and other charges are separate and can meaningfully raise your true monthly outlay. Leave room in your budget for those extras, and treat the loan figure here as the financing portion rather than the full cost of the purchase.
What interest rate should I enter?
Use the annual percentage rate you realistically expect to be offered, which depends on your credit, the loan type and current market rates. If you have not been quoted a rate, enter a slightly conservative estimate so you do not overstate your borrowing power. Once a lender pre-approves you with a firm rate, rerun the calculation, since even a small change in rate noticeably shifts the maximum loan a fixed payment can support.