1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term, including interest. It's used by DBS Bank and other financial institutions to determine loan repayments.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (SGD)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of monthly payments
• \( PMT \) — Monthly payment amount (SGD)

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Calculation

Details: Accurate loan payment calculation helps borrowers understand their financial commitments, compare loan offers, and budget effectively for repayments.

4. Using the Calculator

Tips: Enter the loan amount in SGD, annual interest rate (DBS personal loan rates typically range from 3.88% to 12.88%), and loan term in months (usually 12-60 months for personal loans).

5. Frequently Asked Questions (FAQ)

Q1: What are typical DBS personal loan terms?
A: DBS offers personal loans from 1 to 5 years (12-60 months) with amounts from SGD 1,000 to 10 times your monthly income.

Q2: How does DBS determine interest rates?
A: Rates depend on your credit score, income, existing relationship with DBS, and current promotions.

Q3: Are there additional fees?
A: DBS charges a 1% processing fee (minimum SGD 100) for personal loans. Early repayment may incur fees.

Q4: Can I change my loan term after approval?
A: Generally no - the term is fixed at approval. You may need to refinance to change terms.

Q5: How accurate is this calculator?
A: This provides estimates. Actual DBS loan terms may vary based on your specific circumstances and current bank policies.