1. What is the Loan Payment Calculator?

This calculator helps you determine your monthly loan payments based on current interest rates in Nepal. It's useful for planning home loans, car loans, or personal loans from Nepalese banks and financial institutions.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating equal monthly payments that pay off both principal and interest.

3. Current Interest Rates in Nepal

Details: As of 2024, typical interest rates in Nepal range from 8-12% for home loans, 10-14% for personal loans, and 12-16% for auto loans. Rates vary by bank and borrower's credit profile.

4. Using the Calculator

Tips: Enter the loan amount in NPR, annual interest rate (without % sign), and loan term in years. The calculator will show your monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: Are Nepal's loan rates fixed or variable?
A: Most loans in Nepal have variable rates that change with NRB's monetary policy, though some banks offer fixed-rate options.

Q2: What additional costs should I consider?
A: Factor in processing fees (0.5-2% of loan amount), insurance, and possible prepayment penalties.

Q3: How can I reduce my total interest paid?
A: Make larger down payments, choose shorter terms, or make occasional extra principal payments.

Q4: What's the maximum loan term in Nepal?
A: Home loans typically go up to 20 years, while personal loans are usually 5-7 years maximum.

Q5: How often do Nepalese banks compound interest?
A: Most banks in Nepal compound interest monthly for loans.