The result is a ceiling, not a target. Borrowing comfortably below what the math allows leaves room for the months when life does not follow the budget.
How it is calculated
P = M × ((1 + r)^n − 1) ÷ (r × (1 + r)^n)
P is the maximum loan principal the payment can support.
M is the monthly payment you can afford after normal living costs and existing debts.
r is the monthly interest rate as a decimal — the annual rate divided by 12.
n is the number of monthly payments you are willing to commit to.
This is the amortized repayment formula solved for P: plug the resulting P back in, and the payment comes out as M.
Example
Say your budget allows 8,000 THB per month, lenders quote 12% per year (1% per month), and you are comfortable with a 36-month term. Then P = 8,000 × ((1.01)^36 − 1) ÷ (0.01 × (1.01)^36) = 240,860.04 THB — call it a ceiling of about 240,000 THB.
Stretch the term to 48 months and the ceiling rises, but so does total interest; shorten it to 24 months and you can borrow less but pay far less interest overall. Rerunning the numbers across a few terms shows the trade-off clearly.
Understanding your result
Treat the result as your walk-away number when shopping for a loan. Offers above it fail your own affordability test, whatever the lender's assessment says.
Derive the affordable payment honestly: income minus fixed costs, existing debt payments, and a buffer for surprises. A debt-to-income check alongside this calculation keeps the payment within a healthy share of income.
Once you settle on an amount, fix the payment, rate, term, and dates in a written loan agreement — the affordability work only pays off if the final agreement matches the numbers you tested.
Frequently asked questions
How do I decide what monthly payment I can afford?
Start from net monthly income, subtract fixed living costs and existing debt payments, then subtract a safety buffer — many people use 10–20% of income. What remains is the realistic ceiling for a new payment. Be pessimistic; an optimistic budget becomes a missed payment later.
Why does a longer term let me borrow more?
The same monthly payment repeated more times repays more principal, so the supportable loan grows. But interest runs for longer too, so the total cost rises with the term. The formula shows both effects — a bigger P now, more interest across the life of the loan.
Does this calculator account for fees and insurance?
No — it models principal and interest only. Application fees, insurance, and other charges either reduce the cash you receive or add to the monthly outflow. Ask the lender for the total monthly cost including everything, and use that figure as your affordable payment M.
How is this different from what the bank calculates?
Banks assess what they are willing to lend using income proofs, credit history, and their own DTI thresholds. This calculator answers a different question: what you can sustainably pay. Take the lower of the two answers — being approved for a loan is not evidence you can afford it.
What interest rate should I use before I have an offer?
Use the highest rate you might realistically be quoted, not the advertised best case. Running the calculation at a pessimistic rate keeps the ceiling safe; if the real offer comes in lower, the loan is more affordable than planned — a pleasant surprise instead of a painful one.
Can I use this for money borrowed from family or friends?
Yes — affordability matters even more when the lender is someone you care about. Work out the payment you can commit to, agree the amount it supports, and record both in a simple written agreement with dates. Failing a bank costs fees; failing family costs more.
Results are estimates for general information only and may differ from a lender's exact figures. They are not financial or legal advice.