How to calculate my Max loan eligibility

MOney

 

How to calculate my Max loan eligibility

 

Different bank would have different Debt service ratio allowability and different income & debt calculations to determine your max Loan. All the income and debts that had been take into consideration has been listed at previous article, don’t be shy to take a peek back at previous article.

Here I will take Few scenarios 3 banks, bank calculation on income and debts I will take the average calculation formula applied to our scenarios, so that it won’t be confusing.

Let’s get started.

Bank A DSR: 50%
Bank B DSR: 70%
Bank C DSR: 85%

Example 1:

Scenario 1

Mr Ahmad Wish to Purchase RM800,000 property price, getting 90% loan margin of finance from the bank (RM720,000 Loan financing)

Mr Ahmad’s Income:

1. Gross income RM6000

2. Commission:
-August Rm1000
-July RM2000
-June RM1500
-May Rm900
-April RM1100
-March Rm1500

3. Fixed allowance RM600

4. Rental income: Rm1000

Mr Ahmad’s Debts:

1. Hire Purchase: RM70,000 (Credit limit)
2. Credit cards: Rm10,000 (Outstanding amount)
3. Personal loan: RM10,000 (Credit limit)

Will he received any acceptance on his loan ?

Let’s dwell into how bank calculate income and how do we look at the DSR % of each banks

Bank’s Calculation (*Do take note, every bank’s computation are totally different, below serve as a reference*)

Income

-Gross income: RM6000

-Commission: RM8000 Total (Rm8000 * 80%) = RM6400/6 = RM1066
(For variable income, bank will take average 80% of the income only)

-Fixed Allowance: RM600

– Rental Income: RM1000 (RM1000* 80%) = RM800
(Rental income, bank will take only 80%)

Total Income = Rm6000 + Rm1066 + Rm600 + Rm800

= RM8466

Net income= RM8466 – SOSCO (RM19.75) – TAX (RM925.6) – EPF (RM931)
= RM6609

Debt Commitments

1. Hire Purchase RM70,000 =  (RM70,000 *1.272 )/108

= Bank’s installment RM 824.4

  1. Credit card Outstanding RM10,000 = Rm10,000 * 5%
    = RM500
  2. Personal loan Rm10,000 = (Rm10,000 * 1.685 )/120
    = Rm150.9

 

Total debt is RM824.4 + RM500 + RM150.9 = RM1464.9

New loan

RM720,000, 4.5%, 35 years loan tenure

loan installment would be RM3407.45

Total debt is RM1464.9 + 3407.45 = Rm 4872.35

DSR = 4872.35 / 6609

= 74%

Bank A DSR: 50%
Bank B DSR: 70%
Bank C DSR: 85%

Hence only Bank C would be the bank that can provide the financing for your RM800,000 SPA price property.

Scenario 2

Income

1. Gross income RM6000

2. Commission:
-August Rm1000
-July RM2000
-June RM1500
-May Rm900
-April RM1100
-March Rm1500

3. Fixed allowance RM600

4. Rental income: Rm1000

Mr Ahmad’s Debts:

1. Hire Purchase: RM70,000 (Credit limit)

Will he received any acceptance on his loan ?

Let’s dwell into how bank calculate income and how do we look at the DSR % of each banks

Bank’s Calculation (*Do take note, every bank’s computation are totally different, below serve as a reference*)

Income

-Gross income: RM6000

-Commission: RM8000 Total (Rm8000 * 80%) = RM6400/6 = RM1066
(For variable income, bank will take average 80% of the income only)

-Fixed Allowance: RM600

– Rental Income: RM1000 (RM1000* 80%) = RM800
(Rental income, bank will take only 80%)

Total Income = Rm6000 + Rm1066 + Rm600 + Rm800

= RM8466

Net income= RM8466 – SOSCO (RM19.75) – TAX (RM925.6) – EPF (RM931)

= RM6609

Debt Commitments

1. Hire Purchase RM70,000 =  (RM70,000 *1.272 )/108
= Bank’s installment RM 824.4

 

Total debt is RM824.4

New loan

RM720,000, 4.5%, 35 years loan tenure
loan installment would be RM3407.45

Total debt is RM824.4 + 3407.45 = Rm 4231.85

DSR = 4231.35 / 6609
= 64%

Bank A DSR: 50%
Bank B DSR: 70%
Bank C DSR: 85%

Hence Bank B and C will able to provide the financing.

Above is reference calculation for each bank, DSR 70% will be the safest bet, however different bank will give different DSR based on different income amount.

If you earn less than RM3000, DSR would usually be 50-70%

If >RM3000 – <RM5000, DSR will be 60-85%

Drop any inquiries below comment

Cheers 🙂

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