Approval Rate Impact Calculator

Work out approval rate impact instantly with clear inputs, formula shown and shareable results.

About Approval Rate Impact Calculator

Loosening a credit policy adds volume from the weakest part of the applicant distribution, so the marginal bad rate is far worse than the portfolio average. The marginal good-to-bad ratio is the test of whether the expansion pays.

Formula

Marginal expansion

Extra approvals = applications × (new rate - current rate); split by the marginal bad rate

Worked example

With the default values below, Approval Rate Impact Calculator returns Additional Approvals Per Month of 640. Change any input above and every figure here is recalculated in your browser.

Inputs used

Monthly Applicationsaccepts 1–10,000,000: 8,000
Current Approval Rateaccepts 1–100 %: 48 %
Proposed Approval Rateaccepts 1–100 %: 56 %
Bad Rate On The Extra Approvalsaccepts 0–60 %: 8 %

Results

Additional Approvals Per Month: 640
Additional Good Accounts: 589
Additional Bad Accounts: 51
Good To Bad Ratio On The Margin: 11.50

Step by step

1Values used
2Marginal expansion
3Additional Approvals Per Month= 640
4Additional Good Accounts= 589
5Additional Bad Accounts= 51
6Good To Bad Ratio On The Margin= 11.50

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why is the marginal bad rate so much higher?

Because the extra approvals come from just below the previous cut-off, the riskiest slice of accepted business.

What ratio is acceptable?

It depends on margin and loss given default — a high-margin product can absorb a far worse ratio than a thin-margin one.