Loan Calculator In Malaysia

Loan Payment Formula:

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

Principal Amount (P):

MYR

Annual Interest Rate:

Loan Term:

years

Loan Type:

Monthly Payment (PMT):

Total Payment:

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest. This is the standard formula used for most personal and home loans in Malaysia.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

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

Where:

\( P \) — Principal loan amount (MYR)
\( r \) — Monthly interest rate (annual rate divided by 12)
\( n \) — Total number of payments (loan term in years × 12)
\( PMT \) — Monthly payment amount (MYR)

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: Understanding your monthly payment helps with budgeting and financial planning. It also allows you to compare different loan options and terms to find the most suitable one for your needs.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate (without % sign), loan term in years, and select the loan type. All values must be valid (principal > 0, interest rate ≥ 0, term ≥ 1 year).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between personal and home loans?
A: Home loans typically have lower interest rates but longer terms, while personal loans have higher rates but shorter terms. Home loans are secured against property.

Q2: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms mean higher monthly payments but less total interest.

Q3: Are there other costs not included here?
A: Yes, this calculator doesn't include processing fees, insurance, or other charges that may apply to Malaysian loans.

Q4: What is a typical interest rate in Malaysia?
A: As of 2023, personal loans average 5-10%, while home loans average 3-5%, depending on OPR and your credit profile.

Q5: Can I use this for Islamic financing?
A: This calculator uses conventional interest calculation. For Islamic financing (like Ijarah or Murabahah), different calculations apply.