Build a Loan Affordability Budget

Lender approval and personal affordability are different things.

Start with take-home income and subtract:

Then stress-test the proposed payment.

Example

Take-home income: $4,800

Normal expenses and savings: $4,250

Remaining: $550

A $500 loan payment technically fits, but leaves almost no room for an unexpected expense.

A better question is:

Can I make this payment during a difficult month without borrowing again?

See more budgeting and borrowing guides at EasyLoanWorld.