1. What is the Personal Loan Eligibility Calculator?

This calculator determines the maximum loan amount you may be eligible for based on your affordable monthly payment, interest rate, and loan term. It's particularly useful for Malaysian bank loans like CIMB's personal loans at 4.38% p.a.

2. How Does the Calculator Work?

The calculator uses the loan eligibility formula:

Where:

• \( P \) — Principal loan amount (MYR)
• \( PMT \) — Affordable monthly payment (MYR)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Loan term in months

Explanation: The formula calculates the present value of a series of future payments at a given interest rate, determining the maximum loan amount you can afford.

3. Importance of Loan Eligibility Calculation

Details: Knowing your maximum eligible loan amount helps in financial planning and ensures you don't over-commit to monthly payments that may strain your budget.

4. Using the Calculator

Tips: Enter your comfortable monthly payment amount, the annual interest rate (e.g., 4.38 for CIMB Bank), and desired 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, but generally range from 4.38% p.a. (CIMB) to 10% p.a. or more for other banks.

Q2: How does loan term affect eligibility?
A: Longer terms increase eligibility amount but result in more total interest paid. Shorter terms reduce eligibility but save on interest.

Q3: What factors affect actual bank approval?
A: Banks consider credit score, income, existing debts, and employment history beyond just this calculation.

Q4: Should I borrow the maximum eligible amount?
A: Not necessarily. Consider your financial cushion and unexpected expenses before committing to maximum payments.

Q5: Are there other fees not included in this calculation?
A: Yes, some banks charge processing fees (e.g., 1% of loan amount) or insurance which would reduce actual disbursed amount.