Enter the monthly net income ($) and the monthly expenses ($) into the Calculator. The calculator will evaluate the Borrowing Capacity.

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## Borrowing Capacity Formula

BC = NI - E

Variables:

- BC is the Borrowing Capacity ($)
- NI is the monthly net income ($)
- L is the monthly expenses ($)

To calculate Borrowing Capacity, simply subtract the person’s monthly expenses from their net income after taxes.

## How to Calculate Borrowing Capacity?

The following steps outline how to calculate the Borrowing Capacity.

- First, determine the monthly net income ($).
- Next, determine the monthly expenses ($).
- Next, gather the formula from above = BC = NI – E.
- Finally, calculate the Borrowing Capacity.
- After inserting the variables and calculating the result, check your answer with the calculator above.

**Example Problem : **

Use the following variables as an example problem to test your knowledge.

monthly net income ($) = 9000

monthly expenses ($) = 4000