1. What is the PMT Formula?

The PMT formula calculates fixed monthly payments for a loan with a fixed interest rate. It's commonly used for personal loans, auto loans, and mortgages. The formula accounts for both principal repayment and interest charges.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Number of monthly payments (loan term in months)
• \( PMT \) — Fixed monthly payment amount (USD)

Explanation: The formula calculates the fixed payment required to fully amortize (pay off) the loan over its term, including both principal and interest components.

3. About Credit Karma Loans

Details: Credit Karma offers a loan marketplace where users can compare personal loan offers from various lenders. User reviews vary regarding ease of use and accuracy of loan offers.

4. Using the Calculator

Tips: Enter the principal amount in USD, annual interest rate as a percentage (e.g., 5.5 for 5.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator for Credit Karma loans?
A: This provides a general estimate. Actual loan offers may vary based on credit score, lender policies, and other factors.

Q2: Does this include loan fees?
A: No, this calculates base payments only. Some loans have origination fees or other charges that would increase total cost.

Q3: What's a typical personal loan term?
A: Personal loans typically range from 12-84 months, with 36-60 months being most common.

Q4: How does interest rate affect payments?
A: Higher rates increase monthly payments significantly. A 1% rate increase on a $10,000 loan could add $5-10 to monthly payments.

Q5: Can I use this for other types of loans?
A: Yes, this formula works for any fixed-rate loan (mortgages, auto loans, etc.), though some may have different fee structures.