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. It's used for personal loans in Malaysia with low interest rates, such as those offered by CIMB at 4.38% p.a.

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 months)
• \( PMT \) — Fixed monthly payment amount (MYR)

Explanation: The formula accounts for compound interest and spreads the repayment equally over the loan term.

3. Importance of Loan Calculation

Details: Calculating your monthly payments helps with financial planning, comparing loan offers, and ensuring the loan is affordable within your budget.

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 months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a low interest personal loan in Malaysia?
A: Typically under 5% p.a. for good credit applicants. Rates vary by bank and credit profile.

Q2: How does loan term affect monthly 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 fees besides interest?
A: Some banks charge processing fees (1-3% of loan amount) or early settlement fees. Check with your bank.

Q4: Can I get a lower interest rate?
A: Rates depend on credit score, income, employment, and relationship with the bank. Shop around for best rates.

Q5: What's the maximum loan term in Malaysia?
A: Typically 5-10 years for personal loans, though some banks offer longer terms for specific purposes.