1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term. It accounts for the principal amount, interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Note: This calculator compares UK-style personal loan rates and is not specific to Malaysia.

3. Importance of Loan Comparison

Details: Comparing loan rates helps borrowers understand the true cost of borrowing, including both principal and interest payments over the loan term.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Why compare UK loan rates to Malaysia?
A: This provides a baseline comparison, though actual Malaysian loan terms may differ based on local regulations and market conditions.

Q2: What's included in the monthly payment?
A: The calculated PMT includes both principal and interest components for each payment.

Q3: Does this include fees or insurance?
A: No, this calculation only includes principal and interest. Additional fees would increase the total cost.

Q4: How accurate is this for Malaysian loans?
A: While the formula is universal, Malaysian lenders may use different calculation methods or include additional factors.

Q5: Can I use this for other types of loans?
A: This is designed for fixed-rate personal loans. Mortgages or variable-rate loans may require different calculations.