Lic Loan Calculator

Loan Payment Formula:

\[ PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

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1. What is the LIC Loan Calculator?

The LIC Loan Calculator helps you determine your monthly payment amount for a loan from Life Insurance Corporation of India. It uses the standard amortization formula to calculate fixed monthly payments.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

\[ PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Where:

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

Explanation: The formula calculates the fixed monthly payment required to pay off a loan over a specified period, including both principal and interest components.

3. Importance of Loan Payment Calculation

Details: Knowing your exact monthly payment helps in financial planning, budgeting, and comparing different loan options before committing to a loan.

4. Using the Calculator

Tips: Enter the principal amount in ₹, monthly interest rate as a decimal (e.g., 0.01 for 1%), and number of payment periods in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual interest rate to monthly?
A: Divide the annual rate by 12 (months) and convert percentage to decimal (e.g., 12% annual = 0.01 monthly).

Q2: Does this include insurance premiums?
A: No, this calculates only the loan payment. LIC may add additional charges like insurance premiums separately.

Q3: What's a typical LIC loan interest rate?
A: Rates vary by policy and market conditions, typically ranging from 9% to 12% per annum.

Q4: Can I prepay my LIC loan?
A: Yes, LIC usually allows prepayment, but check for any prepayment charges in your policy terms.

Q5: How accurate is this calculator?
A: It provides theoretical results based on the formula. Actual payments may vary slightly due to rounding or additional charges.