What installment loan amount can you afford? Your monthly budget for a loan decides on the reasonably affordable rate. But how do you calculate this budget correctly? And what loan amount can you use to finance it? What installment loan amount is possible at German banks? We clarify!
Installment loan amount: This is how much you can afford
Monthly payments are associated with an installment loan: you have to be able to afford the annuity permanently without having to go through the painful waiver elsewhere. In your household bill, therefore, compare the safe monthly income with the smoothed monthly expenditure. The secure income essentially consists of your monthly salary, which you should reduce by overtime bonuses – after all, overtime does not necessarily apply in the future.
In addition to monthly expenses such as rent, cash, telecommunications, energy, etc., you should also take into account expenses that are not incurred every month in your expenditure calculation. Many insurance companies are z. B. billed quarterly or annually, club fees mostly collected in January.
Spending on vacation is typically relevant in a month or two of the year, as is spending on holidays and celebrations such as: B. Christmas. Sum up the monthly and other costs and divide the result by twelve. Then add a security surcharge of 10% – the result corresponds to your carefully calculated total costs. Subtract this from your carefully calculated earnings to get your personal loan budget.
Long term, low rates?
The maximum possible installment loan amount can now easily be determined from your personal loan budget. All you need is the interest rate and the desired term. Are you z. For example, if you have USD 400 available for repayment a month, you will receive a net loan amount of USD 25,566.97 with a term of 72 months and an effective interest rate of 4%. The longer the term and the lower the interest rate, the higher the amount. Compare the current market tools on Astro Finance with the offers on the market!
It goes without saying that the interest rate should be as low as possible. The term is different. The amount of the installment loan that you can afford increases with the duration of the repayment period. The financing costs are higher. If you repay USD 25,000 4% effectively in six years, you will receive a total of USD 3,102.72 in interest. The monthly rate is then 390.32 USD. If you repay the loan at the same interest rate in four years, you will have to raise USD 563.68 per month – but the interest costs will be significantly lower at USD 2056.48.
Conclusion: calculate the budget for the loan
Your personal loan budget is decisive for the loan amount that you can afford. To do this, carefully calculate calculated earnings against your average monthly costs and include a safety margin of 10% in the costs. The difference is your credit budget or servicing ability. You use the budget for the monthly payments. How much credit you get for a certain monthly rate is determined by the interest rate and term. Therefore, look for the cheapest possible installment loan, but do not set the term unnecessarily long, because this increases the total cost of financing.