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. This is the standard formula used for government-backed personal loans in Malaysia.

2. How Does the Calculator Work?

The calculator uses the personal 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 years × 12)
• \( PMT \) — Monthly payment amount (MYR)

Explanation: The formula accounts for both principal and interest payments over the loan term, with payments being equal each month.

3. Importance of Loan Calculation

Details: Accurate loan calculation helps borrowers understand their repayment obligations, compare loan offers, and plan their finances accordingly.

4. Using the Calculator

Tips: Enter principal amount in MYR, annual interest rate in percentage, and loan term in years. All values must be valid (principal > 0, interest ≥ 0, term > 0).

5. Frequently Asked Questions (FAQ)

Q1: What types of loans does this calculator work for?
A: This calculator works for fixed-rate personal loans, including those backed by the Malaysian government.

Q2: Does this include any processing fees or insurance?
A: No, this calculates only the principal and interest payments. Additional fees would need to be added separately.

Q3: How does compounding affect the payment?
A: The formula assumes monthly compounding, which is standard for personal loans in Malaysia.

Q4: What if I want to make extra payments?
A: Extra payments would reduce the principal faster and could shorten the loan term or reduce total interest.

Q5: Are there prepayment penalties for government loans?
A: Most government-backed personal loans in Malaysia don't have prepayment penalties, but check your specific loan terms.