What Is Your Debt Repayment Capacity Or How Much Money Can You Borrow?

To answer this question it comes down to what is your ability to make your payments or your ability to generate extra Cash Flow and what amount of security or assets can you claim to borrow against?

Lenders are interested in your liquidity and solvency, your present financial leverage and your elements of risk, e.g. stability of cash flow. All lenders have certain formulas that they use to determine how much money they will let you borrow, for example: they may let your borrow against some asset that can be resold, like your home or they may let you borrow a certain percentage of your earned income.

It is important to shop around because all lenders are competitive and even if you only save a ¼%, it’s worth it!