Best Loans In Malaysia

Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

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1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term, including both principal and interest. This is the standard formula used for most personal and home loans in Malaysia.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (MYR)
\( r \) — Monthly interest rate (annual rate divided by 12)
\( n \) — Number of monthly payments (loan term in years × 12)
\( PMT \) — Fixed monthly payment amount (MYR)

Explanation: The formula accounts for the compounding effect of interest over the loan term, ensuring each payment covers both principal and interest.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan offers. It also shows the true cost of borrowing through the total interest paid.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of loans can this calculator be used for?
A: This works for most fixed-rate personal loans, home loans, and car loans in Malaysia with equal monthly payments.

Q2: Does this include other loan fees?
A: No, this calculates only principal and interest. Additional fees (processing fees, insurance, etc.) would increase your total cost.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: What's the difference between flat rate and reducing balance?
A: This calculator uses reducing balance method (common for loans). Flat rate calculations (used for some hire purchases) are different.

Q5: How accurate is this calculator?
A: It provides accurate estimates for standard loans, but actual bank offers may vary slightly due to different calculation methods or rounding.