How Much Loan Can You Afford? (Simple Guide)
Introduction
Taking a loan without knowing what you can afford is one of the biggest financial mistakes.
What Determines Loan Affordability
- Income
- Expenses
- Interest rate
- Loan term
Example
A $20,000 loan at 6% over 5 years = manageable monthly payments.
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Tips
- Keep payments under 30% of income
- Avoid long-term high-interest loans
Conclusion
Always calculate before borrowing to avoid financial stress.
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