Loan Payment Formula:
From: | To: |
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.
The calculator uses the loan payment formula:
Where:
Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.
Details: Accurate loan payment calculation helps borrowers understand their financial commitments, compare loan offers, and plan their budgets effectively.
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.
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.