The affordability engine
Cadence assesses affordability with a German Haushaltsrechnung — a household budget calculation — framed as the statutory creditworthiness assessment, the Kreditwürdigkeitsprüfung. It is arithmetic over categorised cash flow, followed by fixed rules.
The Haushaltsrechnung
The budget reduces a statement to one figure: how much income remains each month once unavoidable costs are removed. Everything the engine decides rests on this calculation.
- Net monthly income
- −Living-cost allowance (Pauschale)
- −Rent
- −Existing obligations
- =Available income
Rent and obligations are not estimated — they are read from the categorised transactions, so the budget reflects how the applicant actually spends rather than what they declare.
Living-cost allowance by household size
The Pauschale is a standard monthly figure for everyday living costs — food, utilities, incidentals — that scales with household size. It deliberately excludes rent and existing credit, which are counted separately from the detected transactions.
| Household size | Monthly allowance |
|---|---|
| 1 person | 950 € |
| 2 people | 1.350 € |
| 3 people | 1.700 € |
| 4 people | 2.050 € |
| Each additional person | + 330 € |
These are demo figures. In production the table would track the published reference values for the assessment, but the mechanism is identical: a transparent, look-up allowance rather than a discretionary estimate.
What a clean pass requires
Once available income is known, the requested instalment is tested against a fixed set of thresholds drawn from the active consumer-loan product. Each is a named, inspectable parameter.
Affordability buffer
Available income must cover the new instalment with margin to spare — at least 1.3 times the instalment. A budget that only just balances is not treated as affordable.
Debt-to-income ceiling
Existing obligations plus the new instalment may not exceed 40% of net income. Beyond this ratio the application cannot pass automatically regardless of headroom.
Stability & tenure
Income must score at least 88% on regularity and there must be at least 3 months of statement history. Thin or erratic income is referred, not auto-approved.
Interest-rate stress test
The instalment is recomputed at 10.9% — the 7.9% demo rate plus a 3.0 percentage-point shock — and must still fit the budget, so affordability survives a rate rise.
Adverse markers
Categorised signals such as gambling activity or returned-payment fees flag the file for human review. These are surfaced explicitly rather than averaged away into a score.
The model never decides
Transparent, auditable code
The decision is a pure function of the categorised figures and the published thresholds. The same inputs always yield the same outcome, every threshold is a named constant, and the full calculation — income, allowance, obligations, buffer, ratio, stress instalment — is recorded. An officer or auditor can re-derive any approve, refer or decline by hand.
The language model contributes perception, labelling the cash flow; it contributes no judgement to the outcome. Keeping the decision in deterministic code is what makes it defensible: there is no opaque score to explain after the fact, only arithmetic and rules anyone can follow.