1. What is the PMT Formula?

The PMT (Payment) formula calculates the fixed periodic payment required to pay off a loan over a specified term with a fixed interest rate. It's the standard formula used by banks and financial institutions for personal loans.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

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

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

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It allows you to compare different loan offers and choose the most suitable option.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Does this include Lloyds International's fees?
A: This calculator provides the base payment calculation. Additional fees may apply depending on the specific loan product.

Q2: What's a typical interest rate for personal loans?
A: Rates vary based on creditworthiness, loan amount, and term. Lloyds International personal loans typically range from 5% to 20% APR.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: Can I pay off my loan early?
A: Most Lloyds International loans allow early repayment, though some may have early repayment charges.

Q5: Are the results accurate for all loan types?
A: This calculator is designed for standard fixed-rate personal loans. Other loan types may use different calculation methods.