1. What is the Auto Loan Payment Formula?

The Auto Loan Payment Formula calculates the fixed monthly payment required to repay a car loan over a specified term. The BPI Auto Loan Calculator uses this standard formula to determine your monthly payment amount.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal loan amount (PHP)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula accounts for both principal repayment and interest charges, calculating a fixed payment that fully amortizes the loan over the specified term.

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also allows comparison between different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in PHP, annual interest rate as a percentage (e.g., 5.25), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include insurance and other fees?
A: No, this calculates only the principal and interest payment. Additional costs like insurance or registration fees are not included.

Q2: What is a typical interest rate for BPI auto loans?
A: Rates vary based on creditworthiness, vehicle type, and term length. Current BPI rates typically range from 5% to 12% annually.

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

Q4: Can I calculate payments for different currencies?
A: While the calculator shows PHP, the formula works for any currency if you maintain consistent units.

Q5: How accurate is this calculator?
A: This provides a close estimate, but actual loan terms may vary based on credit assessment and current bank policies.