Loan Affordability Calculator
This is the question the payment calculators cannot answer: given what you earn and what you already repay, how large a loan can you service? Enter your income, obligations, a rate and a term to see the maximum principal.
Filed under Loans & Finance
Key facts
- Borrowing depends on the monthly payment you can service.
- The rate and term set the loan size for that payment.
- Lenders often stress-test affordability at a higher rate.
- Fees, insurance and a deposit reduce what you can borrow.
How much you can borrow
The calculator first works out the monthly payment your income can support at the debt-service share you choose, after existing repayments, then inverts the standard amortisation formula to turn that payment into a principal. The debt-service share is your own assumption — lenders apply their own ratio, and they also weigh your credit history, the loan's purpose and any collateral.
P = M × ((1+r)ⁿ − 1) ÷ (r(1+r)ⁿ)Loan Affordability worked examples
An income of 1,500,000 TZS with 200,000 TZS of other repayments
Asha, a borrower in Dar es Salaam already servicing one loan, works out what a second would allow.
On a 1,500,000 TZS monthly income with 200,000 TZS already going to other repayments, spending 40% of income on debt service leaves 400,000 TZS a month. At an illustrative 15% over 5 years that supports a loan of about 16,814,000 TZS.
A lower income of 700,000 TZS with no other debt
Her colleague Daudi, on a lower income with nothing owed yet, where the same cap allows less.
On a 700,000 TZS monthly income with 0 TZS already going to other repayments, spending 40% of income on debt service leaves 280,000 TZS a month. At an illustrative 15% over 5 years that supports a loan of about 11,770,000 TZS.
Loan Affordability: assumptions and limits
What it assumes
- Applies the debt-service ratio you choose to your income, then inverts the repayment formula to show the loan that payment supports.
- The interest rate and term are illustrative inputs, not a rate published by this site.
Where the result does not apply
- Lenders apply their own debt-service rules, and many also test affordability against a stressed, higher rate.
- Existing obligations, dependants, rent and living costs beyond the figure you enter all affect a real decision.
- Does not account for arrangement fees, insurance or a deposit requirement.
Loan affordability FAQs
How much can I borrow on my salary?
It depends on the monthly payment you can service, the rate and the term. Lenders typically cap total debt repayments at a share of income — this calculator lets you set that share rather than assuming one.
Does a longer term let me borrow more?
Yes. A longer term lowers the payment for the same principal, so the same monthly capacity supports a bigger loan — but you pay more interest in total.
Does this include fees and insurance?
No. It covers principal and interest only. Arrangement fees, insurance and any compulsory savings reduce what you can actually borrow.
What DTI do Tanzanian lenders use?
Lenders apply their own caps, and many test affordability at a higher rate. Ask the lender what share of income it allows for debt rather than assuming a single national figure.
How does the interest rate change what I can borrow?
A higher rate lowers the loan supported by the same monthly payment; a lower rate raises it. Test a stressed higher rate as well, because that is what a cautious lender may do.
Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.
Delta Tech Solutions prepared this page. No external tax, accounting or legal professional reviewed it — the figures were checked against the sources listed above, and you should confirm anything you rely on with the authority that sets it.
Maintained by David M at Delta Tech Solutions · Figures last checked 19 September 2026 · Next check due 19 March 2027
Content updated 24 October 2026
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