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Personal Loan Calculator Rates And Fees Philippines

Loan Payment Formula:

\[ PMT = (P + fees) \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

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months

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1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates your fixed monthly payment (PMT) based on the principal amount, interest rate, loan term, and any origination fees. This is the standard formula used by most banks in the Philippines.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

\[ PMT = (P + fees) \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

Explanation: The formula accounts for both the principal and fees, then calculates the fixed payment needed to pay off the loan over the specified term with compound interest.

3. Understanding Loan Fees in Philippines

Details: Many Philippine banks charge processing fees (e.g., Union Bank charges 6.5%). These fees are typically deducted from the loan amount or added to the principal. This calculator includes them in the total amount financed.

4. Using the Calculator

Tips: Enter principal in PHP, any origination fees, annual interest rate (e.g., 10.5%), and loan term in months (e.g., 12 for 1 year). The calculator will show your monthly payment, total interest, and total repayment amount.

5. Frequently Asked Questions (FAQ)

Q1: What are typical interest rates in Philippines?
A: Personal loan rates typically range from 10% to 24% annually, depending on the bank and your creditworthiness.

Q2: How are processing fees handled?
A: Fees are either deducted from the loan amount (you receive less) or added to the principal (you pay interest on them). This calculator assumes they're added to principal.

Q3: What's the maximum loan term available?
A: Most banks offer terms from 12 to 60 months, with some extending to 84 months for larger loans.

Q4: Are there prepayment penalties?
A: Some banks charge prepayment penalties if you pay off the loan early. Check with your lender.

Q5: How accurate is this calculator?
A: It provides accurate estimates, but actual loan terms may vary based on your credit assessment and the bank's specific policies.

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