Can I afford it? Affordability check

How the affordability check works

Last updated 10 November 2026

Before buying something on credit, it helps to see what the payment does to the rest of the month. This check takes your take-home pay and fixed costs, adds the instalment and shows what is left.

How it works

Amount borrowed = price minus deposit.
Monthly payment = amount borrowed × r ÷ (1 − (1 + r)⁻ⁿ), where r is the yearly rate divided by 12 and n is the number of months.
Left each month = take-home pay minus fixed costs minus the payment.
Interest is the total of the payments minus the amount borrowed.

Worked example

With the starting figures:

You borrow R 40 000 and pay R 1 897 a month.
Interest over the term is R 5 528, so the total cost with the deposit is R 50 528.
Fixed costs rise from 57% to 63% of your pay, leaving R 11 103.

What question this answers

Before you take on a car, a laptop or a set of furniture on credit, it helps to see what the repayment does to the rest of your month. This check starts with your take-home pay and your fixed costs, adds the new instalment and shows what is left for food, transport, savings and surprises.

What to enter

Take-home pay: the money that reaches your account after tax and deductions.
Fixed costs: rent or bond, insurance, school fees, existing loan instalments and anything else you must pay every month.
Price and deposit: the price and what you pay up front.
Interest rate and term: from the lender's quote or the credit agreement.

Reading the results

You see the monthly payment, the total interest over the term and the full cost including the deposit. You also see your fixed costs as a share of your pay before and after the new payment, and what is left each month. A bigger share of pay going to fixed costs leaves less room if prices rise or your income drops.

Try different terms

A longer term lowers the monthly payment but raises the total interest, because you borrow the money for longer. A shorter term does the reverse. Try several terms and compare the payment, the interest and what is left each month. A bigger deposit reduces all three.

What this does not cover

The payment is worked out with the standard loan formula. Real credit agreements may add initiation fees, monthly service fees and insurance, which change the instalment. Use the lender's quote for the exact figure. For a car loan see the car finance calculator, and for a home loan the bond repayment calculator.

Things to watch

Leave room for food, transport and surprises. What is left has to cover everything not listed as a fixed cost.
Rates, fees and insurance on credit agreements differ. Use the lender’s quote for the exact payment.
A longer term lowers the payment but raises the interest. Try different terms.

This is a calculation, not advice. See the disclaimer. For a car purchase, see the car finance calculator; for your whole month, the monthly budget planner.

Questions people ask

Does this tell me whether I should buy?

No. It shows the numbers: the payment, the interest and what is left each month. The decision is yours.

What should I count as fixed costs?

Costs that come out every month whatever happens: bond or rent, other instalments, insurance, medical aid, school fees and minimum debt payments. Groceries and fuel are not included here, so keep some of what is left for them.

How is the payment worked out?

With the standard loan formula: the amount borrowed times the monthly rate, divided by one minus the monthly rate plus one raised to the minus number of months. Fees are not included.