WHAT SHOULD BE THE MAXIMUM LOAN
YOU SHOULD TAKE?
LOAN
Take only what you can comfortably repay.
1. THE PRINCIPLE
Your total EMI (Equated Monthly Instalment) should not exceed 30-40% of your take-home monthly income. This keeps your finances healthy and leaves room for other essential expenses and savings
Maximum Affordable EMI
Max for EMI
2. HOW TO CALCULATE THE MAXIMUM LOAN?
Where:
Step 1: Calculate your maximum affordable EMI
P = Loan amount (Principal) Monthly interest rate
(Annual interest rate + 12 +100)
n Loan tenure in months
Max EMI Take-Home Income x 30% to 40%
Step 2: Use the loan EMI formula to find the maximum loan amount you can take.
Pxrx (1+r)
Tip: Choose a loan amount (P) that gives an EMI less than or equal to your Max EMI.
He wants to know the maximum home loan he can take.
Using the EMI formula and Max EMI of $1,050
Take-Home Income
Safe EMI (35% of income) - $3,000 - 35%
Loan Tenure 20 years (240 months) Monthly Interest Rate (r)-8-12-100 -0.006667
Less money for savings, investments and emergencies
What does this mean?
Rahul should ideally take a home loan of $172,000 or less so that his EMI stays around $1,050 per month.
Always keep room for savings and emergencies
Job stability & income growth
Ensure a stable income to handle the EMI throughout the tenure.
Your loan should fit your income, not the other way around.
Keep EMI s 30-40% of take-home income. Calculate before you commit.
Borrow smart, live stress-free.
Borrow wisely today, enjoy peace of mind tomorrow.