How exactly is the loan limit calculated?

[Orborde]

I'm running near the limit. Despite progressively paying down my loan amount and steadily accumulating more workers, the limit for my republic keeps dropping and dropping, and I don't understand why.

[forzion]

The limit will not shrink if your population will not shrink.

[RP-BOOST]

This is a doubt I have, because I started with a limit of 1970000, if I'm not mistaken, about 1970000 limit and I didn't use it in the first 2 years and my initial population was 10500, because I choose to start with cities and populations, not yet use, I'm exploiting the border workers. Anyway, what I mean is that today (in the game) I am in the year 1967 and my limit for loans is almost 5000000 and with a population of 10191. In the year 1964 I made a loan of 110000 thousand rubles for 5 years that I am almost for to finish, but the fact is if the population influences, so why does my credit limit only increase, even if the population is the same or in my case, reducing it a little?

[Locke]

I think the limit is corrected by inflation too.

[RP-BOOST]

That would then make more sense.

[forzion]

The loan limit is dependant on foreign workday cost and it inflates over time by about 5% for RUB and 2% for USD each year.

[RP-BOOST]

I understand, inflation in this context is what weighs the most in this equation, at least that's what I realized.

[Orborde]

Originally posted by forzion:

The limit will not shrink if your population will not shrink.

Here I am in April 1963 with 1,336 population (881 workers) and a total loan limit of 1505368+611274 = 2,116,642 rubles:
https://steamcommunity.com/sharedfiles/filedetails/?id=2864240041

and here is the same game in a later save of July 1965 with 1,966 population (1138 workers) and a total loan limit of 1509539 + 17655 = 1,527,194 rubles:
https://steamcommunity.com/sharedfiles/filedetails/?id=2864240024

So somehow, despite inflation and having more population, the bank has reduced my available credit by over half a million rubles.

[Silent_Shadow]

Originally posted by Orborde:

So somehow, despite inflation and having more population, the bank has reduced my available credit by over half a million rubles.

Was this before or after you took out a loan? If you are paying a loan back it is only natural that your available credit is reduced.

[Orborde]

Originally posted by Silent_Shadow:

Originally posted by Orborde:

So somehow, despite inflation and having more population, the bank has reduced my available credit by over half a million rubles.

Was this before or after you took out a loan? If you are paying a loan back it is only natural that your available credit is reduced.

I was calculating my credit limit as (Total amount owed + Maximum amount you can borrow now).

i.e. I am basically assuming that if I pay back 10,000 rubles, then 10,000 rubles becomes available to borrow again immediately. Is that not how it works?

[Orborde]

Originally posted by Orborde:

I was calculating my credit limit as (Total amount owed + Maximum amount you can borrow now).

i.e. I am basically assuming that if I pay back 10,000 rubles, then 10,000 rubles becomes available to borrow again immediately. Is that not how it works?

Update: got back to my computer and tested, that is not how it works! Repaying loans doesn't seem to increase my available credit at all! That's surprising!

This mechanic seems a bit difficult to manage to me - if your finances are such that you need to roll forward loans, then you can't easily tell whether you'll eventually be able to pay back vs. sink deeper into debt and go bankrupt.

... maybe that's the point of the limit? to discourage you from planning to roll forward loans? That's kind of surprising to me because taking more loans to pay off existing loans is pretty normal for countries and companies, and capping (outstanding loans + borrowable quantity) is sufficient to bankrupt you if you are making dumb decisions.

[forzion]

You are taking loans like there is no interest. Do you even know that the interest will devastate you?

What I see in your screenshots is a loan taken up to it's limit in early game. Just to have an extimate, you have 1.500.000 R worth of debt and you are paying little less than 5% interest on average which is above 60.000 R in a year but you are paying over 50.000 R each month.. Do you export more than you import by at least 75.000 R in a year just to pay off the interest?

Other thing is we cannot see your history how was you doing with loans in the past if you are paying everything timely. The current existing loan is deducted from the overal limit but I cannot tell you what is the weight of the existing loan in that calculation. You can only see how much it would take to repay the loan right now but there is the interest and the expected interest payments may be deducted from the total amount you can borrow too because there is an inflation factor for the existing loans too.

But really the debt ceiling was added to discourage endless rolling of loans forward. You can do it for a while and you need to be careful. But in the end you will end up the same way that you would end up without debt ceiling. Only difference is that you will realize you are screwed and cannot repay sooner.

But still I think the lower debt ceiling is an unexpected outcome and something may be wrong in the calculations but it limits excessive debt so it is not that bad. People still have loans available but if they take too much they cannot take even more.

[Orborde]

Originally posted by forzion:

You are taking loans like there is no interest. Do you even know that the interest will devastate you?

What I see in your screenshots is a loan taken up to it's limit in early game. Just to have an extimate, you have 1.500.000 R worth of debt and you are paying little less than 5% interest on average which is above 60.000 R in a year but you are paying over 50.000 R each month.. Do you export more than you import by at least 75.000 R in a year just to pay off the interest?

https://steamcommunity.com/sharedfiles/filedetails/?id=2865570108

I am collecting >15K rubles per month on net, which is 180K rubles per year, which is more than the annual interest of 5% * 1.5M = 75000 rubles. So, yes, I am exporting enough to stay ahead of the interest and pay off the loan eventually, as long as I can keep taking loan to make the monthly payments. Works fine unless the loan limit starts dropping as fast as I'm paying down the loan XD

Originally posted by forzion:

Other thing is we cannot see your history how was you doing with loans in the past if you are paying everything timely.

I sometimes forget to take out the next loan and go into default briefly, but I don't spend much time in that state (easy to notice because the power goes out).

Originally posted by forzion:

But really the debt ceiling was added to discourage endless rolling of loans forward. You can do it for a while and you need to be careful. But in the end you will end up the same way that you would end up without debt ceiling. Only difference is that you will realize you are screwed and cannot repay sooner.

I contend that what I'm doing is a reasonable way to use loans. I do have to pay attention to whether I'm increasing or reducing my outstanding loan balance. It's not just free money, since if I let the balance grow until it hits the ceiling, I lose.

The calculation of "is my outstanding loan balance increasing or decreasing" is easy enough to do using the existing information in the game. But knowing whether the limit is going to suddenly ruin everything by dropping is hard since the calculation of the limit is opaque, which makes it tough/frustrating to manage.


This is all assuming I understood the intended mechanism of the limit - it's weird that paying back the loan doesn't seem to restore the corresponding amount of limit.

[forzion]

But repaying should restore the limit. It only maybe does not do it immediately. But still you should have a buffer and never any close to limit first.

Unfortunately when I needed loans I did impose self limits even the in-game limits were not present. I would never exceeded the limit anyway.

What I was doiing was only taking loans for significant required investments and then to keep enoigh balance to be able to import critical resourcea. What I mean by that? If I am imparting electronics, then I alway need to have at least enoigh money to load one full teuck of electronics and one full tank of fuel. I had to take multiple loans each year running tight but I always put them together into bigger ones to reduce monthly payment.

You have a lot of small loans and that may cause issues with limit calculation. Try to put them into few bigger ones like turn 4x 100k into one 400k instead. But it may take time as you went to the limit already and you do not have much breathing room.