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 interest. This is the standard formula used by banks and financial institutions in Malaysia.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the life of the loan, 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 allows you to compare different loan offers and choose the most suitable option for your financial situation.

4. Using the Calculator

Tips: Enter the loan amount in MYR, monthly interest rate as a decimal (e.g., 0.005 for 0.5%), and the total number of monthly payments. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly rate?
A: Divide the annual rate by 12. For example, 6% annual = 0.06/12 = 0.005 monthly.

Q2: Does this include other fees?
A: No, this calculates principal and interest only. Additional fees (processing, insurance, etc.) would be extra.

Q3: What's a typical loan term in Malaysia?
A: Common terms are 5 years (60 months), 7 years (84 months), or 9 years (108 months) for personal loans.

Q4: How accurate is this calculator?
A: It provides the exact mathematical calculation, but actual bank offers may vary slightly due to rounding or specific policies.

Q5: Can I use this for housing loans?
A: Yes, the same formula applies, though housing loans in Malaysia often use daily rest interest calculation which may result in slightly different amounts.