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 to determine the periodic payment amount.

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)
• \( n \) — Number of monthly payments (loan term in months)
• \( PMT \) — Monthly payment amount (MYR)

Explanation: The formula calculates the fixed payment that covers both principal and interest each month, ensuring the loan is paid off by the end of the term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It allows you to compare different loan offers and choose the most suitable option for your financial situation.

4. Using the Calculator

Tips: Enter the principal amount in MYR, annual interest rate in percentage, 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: Interest rates vary by bank and borrower's credit profile, typically ranging from 3.5% to 18% per annum.

Q2: How does loan term affect monthly payments?
A: Longer terms result in lower monthly payments but higher total interest paid over the life of the loan.

Q3: Are there other fees besides interest?
A: Some banks may charge processing fees, insurance, or other charges. These are not included in this calculation.

Q4: Can I pay off my loan early?
A: Most banks allow early repayment but may charge a prepayment penalty. Check with your specific bank.

Q5: How accurate is this calculator?
A: This provides a good estimate, but actual payments may vary slightly due to rounding or bank-specific policies.