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

Borrowing Capacity Formula

BC = NI - E


  • 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.

  1. First, determine the monthly net income ($). 
  2. Next, determine the monthly expenses ($). 
  3. Next, gather the formula from above = BC = NI – E.
  4. Finally, calculate the Borrowing Capacity.
  5. 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