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Personal Loan Calculator Bankbazaar Sri Lanka

Loan Payment Formula:

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

LKR
%
months

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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, including interest. It's commonly used by BankBazaar and other financial institutions in Sri Lanka to determine loan repayment amounts.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

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

Where:

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Calculation

Details: Accurate loan payment calculation helps borrowers understand their financial commitments, compare loan offers, and plan their budgets effectively.

4. Using the Calculator

Tips: Enter the loan amount in LKR, annual interest rate as a percentage (e.g., 12.5), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical interest rate for personal loans in Sri Lanka?
A: Rates vary by lender and borrower creditworthiness, typically ranging from 12% to 28% annually.

Q2: Are there other fees besides interest?
A: Yes, loans may include processing fees, insurance, or other charges not reflected in this calculation.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid over the loan's life.

Q4: Can I pay off my loan early?
A: Most lenders allow early repayment but may charge a prepayment penalty - check your loan terms.

Q5: Is this calculator specific to BankBazaar?
A: While using BankBazaar's standard formula, it's applicable to most fixed-rate personal loans in Sri Lanka.

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