The best way to determine how much credit you can assume is to first make an accurate and sensible personal or family budget. Budgets are simple, carefully considered outlines of plans to distribute dollars of earnings.
Before you take a loan, ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. You can make this calculations in two ways. One is to add up all of your basic monthly expenses and then to subtract this total from your take-home pay. If the difference will not cover the monthly payment and still leave funds for other expenses, you cannot afford the loan.
An even more reliable method is to ask yourself what you plan to give up in order to make the monthly loan payment. If you currently save a portion of your income greater than the monthly payment, then you can use these savings to pay off the loan. But if you do not, you will have to forego spending on entertainment, new appliances, or perhaps even necessities. Are you prepared to make this trade-off?