Personal Loan Borrowing Power Calculator

Work out how much you can afford to borrow before applying for your personal loan.

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, updated on October 4th, 2023       

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Calculate your personal loan borrowing power

Before you apply for your personal loan and have your application go down on your credit report, it's important to have an idea of how much you'll be able to borrow. Fortunately, you can do just that right here with Savvy by using our borrowing power calculator. All you'll need to do is fill in some simple details about the number of people applying for your loan, your income and expenses and you can find out how much you may be able to borrow. Start the process with us today and apply for your loan with more peace of mind that you'll be able to afford your repayments.

Calculate your personal loan borrowing power

How much I can borrow with a personal loan?

Personal loans can vary widely in size based on a multitude of different factors, pertaining both to the type of loan you choose and your own profile as a borrower. Some of the most significant factors that will affect your borrowing power include:

Loan security

Whether you opt for a secured or unsecured personal loan will dictate what your maximum borrowing power is. Unsecured personal loans, which are the most common type of personal loan, come with borrowing ranges of $2,000 to $75,000. However, secured loans increase their minimum loan amounts to $15,000 and maximums all the way up to $100,000. This doesn’t mean you’ll always be approved for the maximum, though, as other factors will still dictate your personal borrowing power.

Your credit score

The higher your credit score, the more you’re eligible to borrow. That’s the general rule that lenders adopt when considering personal loan applications, as a strong credit rating indicates a trustworthy borrower. As a result, they’ll be more willing to lend you a greater sum of money if you have a proven track record of comfortably and efficiently servicing debt.

Your employment and income

What you earn will largely dictate the terms you’re approved for. You must be able to comfortably afford your monthly repayments to be approved for the best personal loan for your situation, so it makes sense that the more you earn, the greater the repayments you can afford to take on. Additionally, lenders want to see stability in your employment to instil greater confidence that you’ll be able to consistently afford your personal loan commitments.

Your expenses

Your monthly financial commitments also factor in here, however. Subtracting your expenses from your earnings on a monthly basis gives you your disposable income each month. This figure is what lenders base their assessments on, rather than solely your income. You can increase your disposable income in the leadup to your application by cutting costs where possible, which could make a difference to the amount you’re approved for.

Your preferred loan term

Whether you want to repay your loan over a short, medium or long term will inform how much your lender will be willing to approve you for. If your credit is otherwise positive, your approved loan amount is likely to be smaller if you opt for a one- or two-year term compared to a five-year term. For example, if you could only afford around $600 repayments each month, your maximum borrowing power for a two-year term may only be $13,000, compared to a $30,000 loan over five years.

The number of borrowers

If you’re utilising a co-borrower or guarantor, that will also impact your borrowing power. Both of these can increase what you would otherwise be approved for by adding extra security to the loan. A co-borrower brings a second income to the table, which increases the amount you can afford to pay combined. A guarantor is someone in a stronger financial position who guarantees the payment of the loan, giving the lender more confidence in granting you greater sums.

Your dependants

A common part of the personal loan application process is determining the number of dependants you have. Having kids is obviously a substantial drain on anyone’s finances, particularly if the expenses that come from taking care of them are set to increase in the coming years with school fees and other costs. Because of this, this factor will have an impact on what you’re eligible to borrow.

Will my loan’s interest rate and fees affect my borrowing power?

They can – interest and fees are two of the most important factors to compare when it comes to personal loans. These will have a major impact on the cost of the finance agreement, so it’s crucial to give them as much, if not more, weight as all the other variables which factor into your decision-making. This is because lenders will include them in their calculations. For instance, if you were able to comfortably take on a debt of $35,000, your lender may only approve you for a loan of about $30,000 due to any interest and fees charged, which cost $5,000.

There are two types of interest which can apply to your loan: fixed and variable. Fixed interest is locked in for the entirety of your loan agreement and remains the same, preventing any sort of market movement from impacting the cost of your loan. This makes it easier to budget around your loan repayments well into the future, giving you the confidence that you won’t have to pay more than what you’re contributing now. Variable interest, on the other hand, can rise or fall in line with your lender’s changes, meaning they can save you money but also run the risk of costing you more.

Additionally, there are several fees which you should always compare when considering your options with Savvy. These include the following:

  • Establishment fee: $0 to $595
  • Ongoing monthly fee: $0 to $10
  • Early repayment fee: dependent upon the size of loan and time left to run (can cost $600 or more)
  • Late repayment fee: $15 to $35 per late repayment and recurring if the payment isn’t made

One way to effectively compare interest and fees at the same time is to look at your loan’s comparison rate. This is a percentage figure which incorporates both your loan’s rate and its various fees to give you a more accurate representation of the true cost of the loan. While it does include things like your establishment and ongoing charges, early and late fees aren’t guaranteed to occur, so they aren’t included in this calculation.

Types of personal loan

Why compare personal loans through Savvy?

Common personal loan borrowing power questions

Can I always get approved for the maximum loan amount?

No – although unsecured and secured loans are capped at $75,000 and $100,000, respectively, this doesn’t mean you’ll be approved for that amount regardless. As discussed above, there are many other factors which go into your lender’s ultimate decision on whether to approve you and how much to approve your application for.

Why should I use a borrowing power calculator before I apply?

Having a clear understanding of what your borrowing power is when entering the application process is very helpful, as it minimises the risk of applying for more than you can feasibly afford and being denied financing as a result. Although it’s only an estimate, being in the right ballpark for what you can manage will significantly boost your chances.

Will I be able to borrow more if I need a personal loan for my business?

Personal loans are assessed on the strength of the borrower regardless of what they need their loan for. Because of this, asking for a personal loan to put towards your business is unlikely to increase your borrowing power. In this instance, you’re more likely to be approved for a greater sum with an unsecured business loan instead, as these can range up to as much as $500,000 in some cases.

What can I use a personal loan for?

Personal loans are designed to be used for just about anything you need. They’re versatile by nature, meaning you can borrow a substantial amount to consolidate significant debts or opt for a smaller loan to help you pay for some bills or other expenses around the house and just about anything in between. Most lenders will have a list of potential uses they can accept when assessing loans, so you may need to align your proposed purpose for the funds with that list.

Helpful personal loan guides

Still looking for the right personal loan?

Personal loans come in all shapes and sizes, so read more about the ways you can use them, as well as how they might work for you.