Loan Affordability Calculator Kenya - How Much Can You Borrow?
Calculate how much loan you can afford based on your income, expenses, and financial situation. Get personalized recommendations for safe and sustainable borrowing.
Your Financial Details
Monthly Income (KES)
Monthly Expenses (KES)
Additional Information
Understanding Loan Affordability
What is Debt-to-Income Ratio?
DTI ratio is the percentage of your monthly income that goes towards debt payments. Lenders typically prefer DTI ratios below 40% for personal loans.
Affordability Guidelines
- • Excellent: DTI ≤ 30% - Very comfortable
- • Good: DTI 30-35% - Manageable
- • Fair: DTI 35-40% - Acceptable but tight
- • Poor: DTI > 40% - High risk
Key Considerations
- • Emergency fund (3-6 months expenses)
- • Job stability and future income
- • Interest rate changes
- • Lifestyle changes or unexpected expenses
- • Credit score impact
Improving Your Affordability
- • Increase your income (side hustle, promotion)
- • Reduce unnecessary expenses
- • Pay off existing high-interest debt
- • Build emergency savings
- • Improve your credit score
When to Borrow
- • For investments that generate income
- • To consolidate high-interest debt
- • For essential needs (education, healthcare)
- • When you have stable income
- • After building an emergency fund
Warning Signs
- • DTI ratio above 40%
- • No emergency savings
- • Unstable income
- • Borrowing for consumption
- • Ignoring interest costs