1. What is the Personal Loan Payment Formula?

The Personal Loan Payment Formula (PMT) calculates the fixed monthly payment required to repay a loan over a specified term, including interest. It's commonly used by lenders like L&T Finance to determine EMI (Equated Monthly Installment) amounts.

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)
• \( n \) — Number of monthly payments (loan term in months)
• \( PMT \) — Monthly payment amount (INR)

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 Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitment, 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 is the typical interest rate for L&T Finance personal loans?
A: Interest rates vary based on credit profile but typically range from 10.5% to 24% per annum.

Q2: How does loan term affect monthly payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total interest.

Q3: Are there any additional charges not included in this calculation?
A: This calculator shows principal + interest only. L&T Finance may charge processing fees, GST, or other charges separately.

Q4: Can I prepay my L&T Finance personal loan?
A: Yes, but prepayment charges may apply depending on loan terms and timing of prepayment.

Q5: How accurate is this calculator compared to actual EMI?
A: This provides a close estimate. Actual EMI may vary slightly due to rounding or specific lender policies.