Loan Payment Formula:
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The PMT (Payment) formula calculates the fixed periodic payment required to pay off a loan over a specified term, including both principal and interest. It's the standard formula used by Lloyds TSB and other financial institutions for fixed-rate loans.
The calculator uses the PMT formula:
Where:
Explanation: The formula accounts for compound interest over the life of the loan, ensuring each payment covers both interest and principal reduction.
Details: Understanding your monthly payment helps with budgeting and comparing loan offers. It also shows the true cost of borrowing through total interest calculations.
Tips: Enter principal in GBP, annual interest rate as a percentage (e.g., 5.5 for 5.5%), and term in months. All values must be positive numbers.
Q1: Does this include Lloyds TSB fees?
A: This calculates base payments only. Lloyds TSB may charge additional fees that affect the total cost.
Q2: What's the difference between APR and interest rate?
A: APR includes fees and other costs, while the interest rate is just the borrowing cost. Always compare APRs when shopping for loans.
Q3: How can I reduce my total interest paid?
A: Choose a shorter term or make additional principal payments when possible (check Lloyds TSB's prepayment policy).
Q4: Are results accurate for variable rate loans?
A: No, this calculator assumes a fixed interest rate. Variable rates will change payments over time.
Q5: What's a typical Lloyds TSB loan term?
A: Personal loans typically range from 1-7 years (12-84 months), but terms vary by loan type and amount.