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, including interest. It's used by Malaysian banks like CIMB, Maybank, and Public Bank for personal loan calculations.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Example: For a RM50,000 loan at 4.38% p.a. over 5 years (60 months), the monthly payment would be approximately RM928.99.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing loan offers from different banks. It also shows the total cost of borrowing.

4. Using the Calculator

Tips: Enter the loan amount in MYR, annual interest rate (e.g., 4.38 for 4.38%), and loan term in years. The calculator will show monthly payment, total repayment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: What interest rates do Malaysian banks offer?
A: Rates vary (typically 3.5-8% p.a.) depending on bank, loan amount, tenure, and credit score. CIMB offers around 4.38% for qualified applicants.

Q2: Are there other fees besides interest?
A: Some banks charge processing fees (1-3% of loan amount) and insurance. These aren't included in this calculation.

Q3: Can I pay off my loan early?
A: Most banks allow early settlement but may charge a penalty (usually 1-3% of outstanding balance).

Q4: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms mean higher payments but less interest overall.

Q5: Is this calculator accurate for all banks?
A: It provides a good estimate, but actual payments may vary slightly due to different bank calculation methods or fees.