1. What is the Personal Loan Payment Formula?

The PMT formula calculates the fixed monthly payment required to repay a loan over a specified period, including interest. It's used by banks and financial institutions in Singapore to determine personal loan repayments.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating the fixed payment needed to fully amortize the loan.

3. Importance of Loan Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitments and compare different loan options in Singapore's competitive personal loan market.

4. Using the Calculator

Tips: Enter loan amount in SGD, monthly interest rate as a decimal (e.g., 0.01 for 1%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good interest rate for personal loans in Singapore?
A: As of 2023, competitive rates range from 3-7% annually (0.25-0.58% monthly) for the cheapest personal loans in Singapore.

Q2: How does loan tenure affect monthly payments?
A: Longer tenures reduce monthly payments but increase total interest paid. Shorter tenures have higher payments but lower total cost.

Q3: Are there other fees besides interest?
A: Some Singapore banks charge processing fees (1-3% of loan amount) and late payment fees. These aren't included in this calculation.

Q4: What's the maximum personal loan amount in Singapore?
A: For Singaporeans/PRs, it's typically 4-10 times monthly salary, capped at S$200,000 across all banks.

Q5: How accurate is this calculator?
A: It provides the theoretical payment. Actual payments may vary slightly due to rounding or specific bank policies.