Stress-test guarantor strength using lender style scoring tools. Tune policy limits for consistent approvals daily. See eligibility, key ratios, and clear next steps now.
| Scenario | Loan | Payment | Guarantor income | Guarantor debts | Credit | Coverage | DTI | Typical outcome |
|---|---|---|---|---|---|---|---|---|
| Strong | $20,000 | $665 | $3,500 | $350 | 760 | 4.7x | 29% | Eligible |
| Moderate | $30,000 | $985 | $2,600 | $550 | 690 | 2.1x | 59% | Borderline (needs adjustments) |
| Weak | $40,000 | $1,310 | $2,200 | $700 | 610 | 1.1x | 91% | Not eligible |
A guarantor can turn a weak application into an acceptable one, but only when their finances can absorb the payment. This calculator estimates capacity using income, recurring debts, savings, and net worth, then compares results with the policy limits you set. Use the guarantor-only mode for strict rules, or combined mode when household cash flow matters. It highlights risk flags and tradeoffs.
DTI equals total obligations divided by monthly income. Many lenders cap DTI near 45%, while conservative programs target 35%. Coverage ratio equals available income (income minus debts and other guarantees) divided by the new payment; 1.5× is a common minimum. If collateral is used, LTV equals loan divided by collateral value; below 85% typically scores better. Reserve months show savings duration clearly.
The score blends credit, DTI, coverage, net worth ratio, reserves, and employment stability into a 0–100 estimate. In this model, scores above 70 usually align with “Eligible” when thresholds are met, while 55–69 often lands “Borderline.” Thresholds still matter: a strong score can fail if credit is below the minimum, DTI exceeds the cap, or bankruptcy is disallowed. Notes clarify outcome drivers.
Borderline cases often improve with small adjustments. Paying down revolving balances reduces monthly debt and lowers DTI quickly. Increasing verified income or adding a co-borrower materially improves DTI and coverage. Building liquid savings to three to six payment months strengthens reserves. Reducing the loan amount or extending term can lower payment and raise coverage, but may increase total interest. Recheck after changes.
Underwriting decisions rely on documented monthly numbers. Enter income using payslips or tax records, and list debts from statements so obligations are not missed. Use the policy settings to match a lender’s rules on minimum credit, maximum DTI, coverage, LTV, residency, and adverse history. Download CSV for spreadsheets and PDF for file notes, then keep recalculations consistent over time. for audit trails.
Guarantor-only uses the guarantor’s income and obligations for DTI. Combined mode adds borrower income and debts too. Use guarantor-only for strict lender policies and combined mode for household-based affordability checks.
Policies vary, but many programs cap DTI around 45%. Strong applications often sit below 35%. This calculator lets you set the maximum DTI so the decision matches the policy you want to model.
Coverage equals available income divided by the new payment. Available income is guarantor income minus guarantor debts and other guarantee obligations. Higher coverage means the guarantor has more monthly cushion for unexpected costs.
Yes. Select the manual payment option and type the lender-provided monthly payment. This is useful when rates, fees, or insurance are bundled into a payment that differs from a standard amortized estimate.
Scores summarize multiple factors, but hard thresholds can override them. If credit is below the minimum, DTI exceeds the cap, coverage is too low, or a disallowed bankruptcy flag is set, the decision can switch to not eligible.
Include liquid savings, investments, and property equity as assets when relevant. List loans, credit balances, and any obligations you would reasonably have to pay. Net worth is assets plus savings minus liabilities in this tool.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.