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's used for ICICI Life insurance-linked personal loans in India, accounting for principal amount, interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Number of monthly payments (loan term in months)
• \( PMT \) — Monthly payment amount (INR)

Explanation: The formula accounts for both principal repayment and interest charges, spreading payments equally over the loan term.

3. Importance of Loan Payment Calculation

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

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's included in the monthly payment?
A: The payment includes both principal and interest components. Insurance premiums (if any) would be additional.

Q2: How does interest rate affect payments?
A: Higher rates increase monthly payments significantly. A 1% rate increase can raise payments by 2-3% depending on term.

Q3: Are there prepayment options with ICICI Life loans?
A: Most ICICI Life-linked loans allow prepayment, but terms vary. Check your specific loan agreement for details.

Q4: What's the typical loan term range?
A: ICICI Life personal loans typically range from 12-60 months, but terms up to 84 months may be available.

Q5: Are there any hidden charges?
A: There may be processing fees (1-3% of loan amount) and insurance premiums. These aren't included in the PMT calculation.