The amount you can repay each month depends on your financial situation. Assume that what you set aside monthly in savings, you can also pay off your loan every month.
Find out exactly how much you are able to repay by making your own estimate of your repayment capacity with the help of a few guidelines.
Repayment capacity = monthly income – monthly expenditure
How do I work out my monthly income?
To calculate your repayment capacity you need to first work out your monthly income.
Your monthly income consists of:
- your salary or other income received for work
- any maintenance allowance
- income from a self-employed activity or second job
- rent received for letting an apartment
A few tips:
- If your income changes from month to month, add it up over a number of months and take the average from that.
- If you're taking out a loan together with another person, work out your joint monthly income, but make sure not to count anything twice. For instance, if you jointly let out an apartment, you can only include the income from it once.
How do I calculate my monthly expenditure?
To help you work out your monthly expenditure, we divide expenses into two large blocks:
1. First you have fixed expenses, such as:
- your current repayments on or rent for your home.
- other current repayments such as for a car or personal loan.
- credit cards and budget facilities. Include around 7% of your total credit card spending limits in your expenses.
2. Then you have your household spending needs:
The amount needed to live each month obviously differs greatly from one family to the next. A study* has shown that a single person in Belgium needs around 970 euros per month to get by. This amount includes food and clothing as well as rent and the usual monthly bills. If you're a KBC client, you can work out your monthly expenses in the KBC Touch personal finance manager tool quickly and easily.
Attention, borrowing money also costs money
Remember, borrowing money costs money. Don't forget that part of the amount has to be used to pay interest on your loan. How much interest will you pay? Work out your loan.
This method does not guarantee that you can actually borrow the amount given. It simply gives you an idea of your financial situation and your repayment capacity. Besides your monthly repayment capacity, risk plays a crucial role.
* Conducted by the centre for social policy.