1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term. It accounts for the principal amount, interest rate, and loan duration. This formula is used by banks offering the lowest personal loan rates in Singapore, such as SCB at 3.07% p.a. EIR (3.48% with fees).

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

• \( P \) — Principal loan amount (SGD)
• \( r \) — Monthly interest rate (annual rate ÷ 12, in decimal)
• \( n \) — Number of monthly payments (loan term in months)
• \( PMT \) — Fixed monthly payment amount (SGD)

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

3. Importance of Loan Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitments, compare loan offers, and budget effectively for repayments.

4. Using the Calculator

Tips: Enter principal in SGD, annual interest rate in percentage (e.g., 3.07 for SCB's rate), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the lowest personal loan rates in Singapore?
A: As of current data, Standard Chartered Bank offers one of the lowest rates at 3.07% p.a. EIR (3.48% including fees).

Q2: How does EIR differ from advertised rates?
A: Effective Interest Rate (EIR) includes all fees and charges, giving a more accurate cost comparison than nominal rates.

Q3: What factors affect loan payments?
A: Principal amount, interest rate, loan term, and any processing fees or insurance premiums included in the loan.

Q4: Are there prepayment penalties?
A: Some banks charge early repayment fees. Check with your lender for specific terms.

Q5: How can I get the best loan rate?
A: Compare offers from multiple banks, maintain a good credit score, and consider loan promotions or relationship discounts.