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 widely used by Malaysian banks like CIMB, Maybank, and Public Bank for personal loan calculations.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for both principal and interest payments over the loan term, with each payment containing a portion that goes toward interest and a portion that reduces the principal.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with financial planning and comparing different loan offers from Malaysian banks. It ensures you can comfortably afford the repayments.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate (e.g., 4.38 for 4.38% p.a.), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for personal loans in Malaysia?
A: Rates vary by bank and credit profile, typically ranging from 3.5% to 18% p.a. in 2023.

Q2: How does loan term affect monthly payments?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q3: Are there other fees besides interest?
A: Malaysian banks may charge processing fees (typically 1-3% of loan amount) and insurance fees.

Q4: Can I prepay my personal loan?
A: Most banks allow prepayment but may charge an early settlement fee (usually 1-3% of outstanding balance).

Q5: How accurate is this calculator?
A: It provides accurate estimates for fixed-rate loans. Actual payments may vary slightly due to rounding or bank-specific policies.