Over the course of a lifetime, many projects require that you apply for a personal loan (consumer credit) to help us finance them. One of the most important questions then is “How much can I borrow for a personal loan”? Here are some information and tools to help you answer it.
Whether a consumer wants to borrow to finance his wedding, work in his apartment, computer equipment or medical expenses, the maximum amount of his loan will depend on several parameters.
Range of personal payday loans
Note that the range of personal payday loans can range from a few thousand euros to several tens. The maximum amount of a consumer loan is generally € 75,000.
Because this type of application does not require proof of use, its meaning is essentially based on the profile of the borrower. Indeed, the credit agency will take into account the total monthly income of the borrower (salary, rental income, annuity, etc.), in order to calculate its borrowing capacity, and therefore repayment.
Know your financial situation
The financial situation of the person applying for credit will also depend on credits already in progress (real estate credit, car loan, etc.). This information will enable the credit agency to calculate the consumer’s debt ratio.
To know that if you want to subscribe to a personal loan, your debt ratio should not exceed 33% of your income.
To answer the question “How much can I borrow for a personal loan? And knowing in advance what the financial institution will offer you, you can calculate your borrowing capacity yourself.
For that, you just need to use one of the many existing loan simulators on the Internet. The loan simulation will give you a fairly accurate idea of the amount you can claim based on your situation.
In general, keep in mind that your borrowing capacity will depend mainly on your monthly net income, your debt ratio and a credit rate grid established by the financial institutions.
Know your debt ratio
In fact, to answer the question “How much can I borrow for a personal loan? You must know your debt ratio.
Here’s how to do it: the question is to know the part of your income that will be used to repay your consumer credit.
The calculation is as follows: debt ratio = (borrowing cost) × 100 ÷ (net income).
Namely, the borrowing burden must include all the monthly loan repayments you have already subscribed, as well as the monthly installments of the loans.
As for income, you will have to take into account your net wages (including bonuses if you have any), your possible non-wage income, and miscellaneous pensions (including alimony).