Loan Payment Formula:
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The PMT (Payment) formula calculates the fixed periodic payment required to pay off a loan with a fixed interest rate over a specified term. It's the standard formula used by banks like Absa for loan calculations in Mauritius.
The calculator uses the PMT formula:
Where:
Explanation: The formula accounts for both principal repayment and interest charges, with more interest paid earlier in the loan term.
Details: Each payment consists of both principal and interest. Early payments are mostly interest, while later payments apply more to principal.
Tips: Enter the loan amount in MUR, annual interest rate (without % sign), and loan term in years. The calculator converts these to monthly values.
Q1: What is the typical interest rate for Absa Mauritius loans?
A: Rates vary (8-15% typically) based on loan type, term, and creditworthiness. Check with Absa for current rates.
Q2: Are there other fees not included in this calculation?
A: Yes, there may be processing fees, insurance, or other charges. Consult Absa for complete cost details.
Q3: Can I pay off my loan early?
A: Most Absa loans allow early repayment, sometimes with prepayment penalties. Check your loan agreement.
Q4: How accurate is this calculator?
A: It provides a good estimate, but actual payments may differ slightly due to rounding or specific bank policies.
Q5: Does this work for other currencies?
A: The formula works for any currency, but this calculator is specifically designed for Mauritian Rupees (MUR).