1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term, including interest. It's commonly used for personal loans, car loans, and mortgages 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 (annual rate divided by 12)
• \( n \) — Number of monthly payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (MYR)

Example: For a RM50,000 loan at 4.38% p.a. over 5 years, the monthly payment would be approximately RM928.99.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing loan offers from different banks in Malaysia like CIMB, Maybank, or Public Bank.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate (e.g., 4.38 for 4.38%), and loan term in years. The calculator will show monthly payment, total repayment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate in Malaysia?
A: Personal loan rates range from 3.5% to 18% p.a. depending on credit score, with Islamic loans typically higher.

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

Q3: Are there other loan costs in Malaysia?
A: Yes, may include processing fees (1-3%), stamp duty, and early settlement fees.

Q4: What's the difference between flat and reducing balance?
A: This calculator uses reducing balance. Flat rate loans calculate interest on original principal throughout the term.

Q5: How accurate is this calculator?
A: It provides estimates. Actual payments may vary slightly due to bank rounding methods or additional fees.