It is the project of a lifetime: to go to the other end of the world to discover Machu Picchu or to admire the sugar loaves of the Bay of Along. This may be the last trip with the children who grew up, or a new honeymoon around the world. Still, this project, if it seems luxurious, can be accessed through a travel credit. In order to better prepare for this adventure, it is essential to estimate the exact budget by calculating its loan capacity.
Why evaluate the loan capacity of a travel credit?
Nothing like financial tranquility to enjoy a physical and spiritual escape. Calculating the loan capacity before taking out a travel loan will make it possible to establish the amount and thus ensure that repayments are manageable in the household budget.
Borrow € 3,000 for a trekking tour in the USA or borrow € 9,000 for a round-the-world version of the world. The lending institution will evaluate the repayment capacity for this credit trip by ensuring that this new monthly payment will not place the debt ratio above the allowed bar of 33% of revenues. The loan capacity will make it possible to calculate the maximum amount to be allocated to this project.
What loan capacity for which trip?
The ratio of borrower household incomes to fixed costs gives the household’s loan and debt capacity. In the Martin family, the couple receives a combined income of € 4,500. He reimburses 900 € for the mortgage and 150 € for the studies of the largest. Its debt ratio is ((900 + 150) / 4500) x 100 = 23.33%.
Its debt margin amounts to 9.67% of its income, which represents a maximum possible monthly maturity of € 435.15. Depending on the chosen repayment period, the Martin family can fly to the Andes Mountains or the Mongolian steppes on a loan of € 5,000 or more. Online simulation for a travel credit is the easiest way to quickly know your loan capacity and prepare your project.