The one-third rule
All your debt repayments together should not be more than a third of your monthly income. If you earn $300 a month, that is $100 in total for every loan. Above that, one bad month becomes a problem you cannot get out of.
Count the income you are sure of
Use your lowest month, not your best. If your income is irregular, choose a shorter term and a smaller amount.
Do the arithmetic yourself
- Monthly income, lowest month
- Minus rent, food, transport, school
- Minus existing repayments
- What is left is what you can repay in a month
- Take a quarter off for surprises
Signs you cannot afford it
If you are borrowing to repay another loan, if you take a salary advance every month, or if you cannot say what you will repay it with, come and talk to us before borrowing. Advice costs nothing.
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