'How much can I borrow?' is a common question. How much you can pay off each month depends on your financial situation. What you can pay is usually the same as what you're able to set aside in savings each month. A golden rule is to subtract your monthly expenditure from your monthly income in order to estimate how much you can afford to repay. Here are a few tips to help you make your estimate more accurate.
The method above doesn't guarantee that you can actually borrow that amount, but it does give you a better idea of your financial situation and what you can afford to pay off.
Your monthly income and expenditure
How much income do you receive each month?
To calculate your repayment capacity for a given loan, you need to know your monthly income:
• Your salary or other income received for work
• Any maintenance payments (alimony)
• Income from a self-employed activity or second job
• Rental income from an apartment or house
What do you spend each month?
You can split your monthly expenditure into 2 broad categories: your fixed expenses and your household expenses.
By fixed expenses we mean:
• Ongoing payments (e.g., mortgage) or rent for your home
• Other ongoing payments, such as for a car loan or personal loan
• Don't forget about your credit cards or overdraft facility (also considered a type of loan). Calculate the total amount you can borrow across all your credit cards and include about 7% of that figure in your expenses
Your household expenses are your general living expenses. This obviously varies greatly from family to family. According to a study by the Centre for Social Policy, a person living alone in Belgium needs roughly 970 euros a month to make ends meet. Besides covering food and clothing, these costs also include rent and typical monthly bills.
If you're a KBC customer, you can use the Personal finance manager tool in KBC Touch to get an instant idea of your monthly expenditure.
Does your income vary each year?
Add up your income over several months and work out the monthly average.
Are you borrowing together with another person?
Add up your joint monthly income, but make sure you don't count any income twice. For example, if you jointly let an apartment, that income can only be counted once.
What about interest?
Always keep interest in mind. You can easily work out the interest to be paid on your loan using the different loan calculators from KBC.
Which loans are available online?
Cover the cost of purchasing your car by taking out our car loan or second-hand car loan. We can also help you with other vehicle loans such as for your scooter, moped, e-bike, (static) caravan and boat.
Like to take out a loan for work on your home? Be sure too check out our renovation loan.
Looking to finance the academic career of your star student, or perhaps you're about to tie the knot? A personal loan lets you pay off these kinds of expenses over a longer period.
At KBC, you can finance your plans online with or without invoices. Our online loans range from 500 euros to a maximum of 50 000 euros. If you require a larger loan, be sure to stop by a KBC branch near you.