Affordability comes first
Lenders compare your income with your committed spending, including rent or mortgage, bills, existing credit and living costs. What is left determines the repayment you can afford.
Debt-to-income
Many lenders look at how much of your monthly income already goes on credit repayments. A lower ratio usually means more borrowing power.
Credit history
A clean record can unlock higher limits and lower rates. Recent missed payments reduce both.
Security
A loan secured on property or another asset can be larger because the lender also looks at the asset's value and loan to value.
Rough guide
- Unsecured: often up to around 40% to 50% of gross annual income, capped by lender limits
- Homeowner loans: limited by combined loan to value, often 75% to 85%
- Business loans: often linked to turnover and profit
Common questions
Can a joint application increase how much I can borrow?
Yes, combined income can increase affordability, but both of you are liable for the full debt.
Does a longer term let me borrow more?
It lowers the monthly payment, which can help affordability, but increases total interest.
This guide is general information, not personal financial advice. If you are worried about debt, free help is available from MoneyHelper, StepChange and Citizens Advice.
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