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 by L&T Finance and other lenders to determine loan payments based on principal amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

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

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also allows comparison between different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in INR, 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: Does this include L&T Finance's processing fees?
A: No, this calculates only the principal and interest portion. Processing fees would be additional.

Q2: What's a typical interest rate for L&T personal loans?
A: Rates vary based on credit profile but typically range from 10% to 24% annually.

Q3: Can I prepay my L&T Finance loan?
A: Yes, but prepayment charges may apply depending on the loan terms.

Q4: How does loan term affect total interest paid?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q5: Are there other charges not included in this calculation?
A: Yes, there may be GST, insurance, or other fees that aren't reflected in this basic calculation.