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. This is the standard formula used by National Savings Bank (Sri Lanka) and most financial institutions for amortizing loans.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

• \( P \) — Principal loan amount (LKR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in months)
• \( PMT \) — Monthly payment amount (LKR)

Explanation: The formula accounts for both principal repayment and interest charges, with payments structured so the loan is fully repaid by the end of the term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It also allows you to compare different loan offers and terms.

4. Using the Calculator

Tips: Enter the principal amount in LKR, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for NSB personal loans?
A: NSB personal loan rates vary but typically range from 12% to 18% per annum depending on loan amount and term.

Q2: Are there any additional charges?
A: NSB may charge processing fees and insurance premiums which are not included in this calculation.

Q3: Can I prepay my NSB personal loan?
A: Yes, but early settlement charges may apply depending on the loan terms.

Q4: How accurate is this calculator?
A: This provides an estimate of standard amortizing loans. Actual payments may vary slightly due to rounding or specific bank policies.

Q5: What's the maximum loan term available?
A: NSB typically offers personal loans with terms up to 7 years (84 months), but this may vary.