Home Back

Personal Loan Calculator 3 Years

Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^{36}}{(1 + r)^{36} - 1} \]

USD
%

Unit Converter ▲

Unit Converter ▼

From: To:

1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates the fixed monthly payment required to pay off a loan over a specified term (36 months in this case) with a fixed interest rate. This is known as the PMT formula in financial mathematics.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

\[ PMT = P \times \frac{r \times (1 + r)^{36}}{(1 + r)^{36} - 1} \]

Where:

Explanation: The formula accounts for both principal repayment and interest charges, with payments structured so the loan is fully paid off after 36 equal monthly payments.

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It allows you to compare loan offers and assess affordability before committing to a loan.

4. Using the Calculator

Tips: Enter the principal amount in USD and the annual interest rate as a percentage (e.g., 5.25 for 5.25%). The calculator assumes a fixed rate for 36 months.

5. Frequently Asked Questions (FAQ)

Q1: Why is my monthly payment higher than expected?
A: Higher payments result from either a larger principal amount, higher interest rate, or shorter loan term. Even small rate changes can significantly impact payments.

Q2: How does the payment change if I pay extra each month?
A: Extra payments reduce principal faster, decreasing total interest and potentially shortening the loan term.

Q3: What's the difference between APR and interest rate?
A: APR includes both interest rate and any fees, providing a more complete cost picture. This calculator uses interest rate for simplicity.

Q4: Are there prepayment penalties?
A: Some loans charge for early payoff. Check your loan terms, as this calculator assumes no prepayment penalties.

Q5: How accurate is this calculator?
A: It provides precise calculations for fixed-rate loans. Actual payments may vary if rates adjust or fees apply.

Personal Loan Calculator 3 Years© - All Rights Reserved 2025