1. What is the Full Settlement Formula?

The full settlement formula calculates the remaining balance of a Malaysian housing loan after k payments have been made. This helps borrowers understand how much they need to pay if they want to settle their loan early.

2. How Does the Calculator Work?

The calculator uses the full settlement formula:

Where:

• \( P \) — Principal loan amount (MYR)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Total loan term (months)
• \( k \) — Number of payments made (months)
• \( B \) — Remaining balance (MYR)

Explanation: The formula accounts for the time value of money, calculating how much principal remains unpaid after k payments.

3. Importance of Full Settlement Calculation

Details: Knowing your full settlement amount is crucial when considering early loan repayment, refinancing options, or property sale.

4. Using the Calculator

Tips: Enter the original loan amount, monthly interest rate (convert annual rate by dividing by 12), total loan term in months, and number of payments already made.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual interest rate to monthly?
A: Divide the annual rate by 12. For example, 4.2% annual becomes 0.042/12 = 0.0035 monthly.

Q2: Does this include any early settlement penalties?
A: No, this calculates only the remaining principal. Check with your bank for any additional fees.

Q3: Why does the remaining balance decrease non-linearly?
A: Early payments mostly cover interest; principal repayment increases over time (amortization).

Q4: Can I use this for other types of loans?
A: This is specific for Malaysian housing loans with fixed interest rates. Other loans may use different calculations.

Q5: How accurate is this calculator?
A: It provides a theoretical estimate. For exact figures, consult your bank as they may use daily rest calculations.