1. What is the Car Loan Payment Formula?

The car loan payment formula calculates the fixed monthly payment required to repay a car loan over a specified period. It accounts for the principal amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment (PHP)
• \( P \) — Principal loan amount (PHP)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of monthly payments

Explanation: The formula calculates the fixed payment needed each month to pay off the loan with interest over the specified term.

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan terms are affordable before committing to a car purchase.

4. Using the Calculator

Tips: Enter the total loan amount in PHP, monthly interest rate as a decimal (e.g., 0.01 for 1%), and number of monthly payments. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly rate?
A: Divide the annual rate by 12 (months). For example, 12% annual rate = 0.12/12 = 0.01 monthly rate.

Q2: What's a typical BPI car loan term?
A: BPI typically offers terms from 12 to 60 months (1-5 years) for car loans.

Q3: Does this include insurance or other fees?
A: No, this calculates principal and interest only. Actual payments may include additional fees.

Q4: What's a good interest rate for a car loan?
A: Rates vary, but as of 2023, BPI rates typically range from 6% to 12% annually depending on creditworthiness.

Q5: Can I pay more than the calculated amount?
A: Yes, making extra payments can reduce total interest and pay off the loan faster.