Enter your budget and loan details
How to use this calculator
- Enter your net monthly income, expenses, debts, and savings goal.
- Adjust the cushion to keep a buffer in your monthly plan.
- Optionally enter a manual payment budget to override the computed amount.
- Choose your term, interest rate, compounding, and payment frequency.
- Leave “Desired loan amount” blank to find an affordable loan size.
- Or enter a desired amount to see if the payment fits your budget.
- Download CSV/PDF for documentation or side-by-side comparisons.
Formula used
- Periodic interest rate: i = (1 + r/m)^(m/p) − 1, where r is APR, m compounding per year, and p payments per year.
- Payment (PMT): PMT = P · i / (1 − (1+i)^−n), where P is principal and n is number of payments.
- Affordable principal (PV): P = PMT · (1 − (1+i)^−n) / i (or P = PMT · n if i = 0).
- Debt-to-income (approx.): DTI = (monthly debts + loan payment monthly equivalent) / monthly income.
Example data table
| Net income | Expenses | Debts | Savings | Cushion | Term | APR | Budget (est.) |
|---|---|---|---|---|---|---|---|
| $4,500 | $2,200 | $350 | $300 | 5% | 5y | 12.5% | $1,567 |
| $6,000 | $3,100 | $600 | $500 | 8% | 7y | 10.0% | $1,656 |
| $3,800 | $2,000 | $200 | $250 | 10% | 3y | 14.0% | $1,215 |
| $7,500 | $3,900 | $1,000 | $800 | 5% | 10y | 9.0% | $1,710 |
| $5,200 | $2,700 | $450 | $400 | 6% | 4y | 11.5% | $1,551 |
Budget Inputs and Payment Capacity
This calculator converts monthly cash flow into a payment budget. Using the default example, income 4,500 minus expenses 2,200, debts 350, and savings 300 leaves 1,650. With a 5% cushion, the usable payment becomes 1,567 per month. A conservative cushion of 8% to 12% is common for households building reserves monthly. Entering a manual payment budget overrides the computed amount, which helps model tighter months or seasonal income.
Rate and Compounding Effects
APR and compounding define the effective periodic rate used in the payment formula. For example, a 12.5% APR compounded monthly with monthly payments produces an effective annual rate near 13.24%. Switching to weekly payments increases payment count but reduces interest per period, which can lower total interest when the payment size stays comparable.
Term Length Trade-offs
Term length shifts affordability and total cost. Holding the payment budget constant, a 5-year term may finance far less than a 10-year term, yet the longer term typically increases total interest. If a borrower targets 36% DTI, the monthly-equivalent payment should keep total debt payments below about 0.36 of income. This tool reports an approximate DTI to support that check.
Fees, Net Proceeds, and Upfront Costs
Loan fees change what you actually receive. With a 1.5% origination fee on a 20,000 loan, the fee is 300 and net proceeds drop to 19,700 before upfront costs. If upfront costs are financed, they increase the financed balance and interest; if paid separately, they reduce cash on hand but keep the loan smaller.
Using Exports for Comparison
The CSV includes the full amortization schedule with payment, interest, principal, and remaining balance for each period. The PDF captures a snapshot of totals, fee impacts, and DTI. Comparing two scenarios—such as 7 years at 10% versus 5 years at 12.5%—is easiest when you export both schedules and review cumulative interest and payoff timing side by side.
FAQs
What does “payment budget per period” mean?
It is the maximum payment you can safely make each payment period (monthly, biweekly, or weekly) after subtracting expenses, existing debts, savings, and your cushion from income.
Why is the affordable loan amount different from net proceeds?
Affordable amount is the financed balance the payment can support. Net proceeds subtract origination fees and, if selected, financed upfront costs, showing what you effectively receive for your goal.
How does the cushion percentage change results?
The cushion reduces your usable payment budget by a chosen percentage. A higher cushion lowers the payment used in calculations, which reduces the financed amount or makes a desired loan less affordable.
What is the difference between APR and effective annual rate?
APR is the stated nominal rate. The effective annual rate reflects compounding and payment frequency, converting the periodic rate back into an annualized figure so you can compare options more consistently.
Should upfront costs be financed or paid separately?
Financing increases the loan balance and total interest, but lowers cash needed at closing. Paying separately keeps the financed amount smaller, often reducing interest, but requires more upfront cash.
Why is the DTI value marked approximate?
DTI here uses your monthly income, your entered monthly debt payments, and the loan payment converted to a monthly equivalent. Lenders may use gross income, additional obligations, and different rounding rules.