1. What is Personal Loan Interest Rate?

The personal loan interest rate is the annual percentage rate (APR) charged by banks for personal loans in Malaysia. For example, CIMB offers personal loans at 4.38% p.a. Interest rates vary by bank and borrower's credit profile.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Loan principal amount (RM)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully repay a loan over its term, including interest.

3. Importance of Interest Rate Calculation

Details: Understanding your monthly payment and total interest helps in budgeting and comparing loan offers from different banks in Malaysia.

4. Using the Calculator

Tips: Enter loan amount in RM, annual interest rate (e.g., 4.38 for 4.38%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical personal loan interest rate in Malaysia?
A: Rates typically range from 3.5% to 10% p.a. depending on the bank and your credit profile.

Q2: How does the loan term affect my payments?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q3: Are there other fees besides interest?
A: Yes, some banks charge processing fees (usually 1-3% of loan amount) and insurance fees.

Q4: Can I get a lower interest rate?
A: Rates depend on your income, credit score, and relationship with the bank. Negotiation may be possible.

Q5: Is a fixed rate better than variable?
A: Fixed rates provide predictable payments, while variable rates may change with market conditions.