Policybazaar Personal Loan Calculator

Personal Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

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1. What is the Personal Loan Payment Formula?

The PMT formula calculates fixed monthly payments for personal loans, considering principal amount, interest rate, and loan term. It's widely used by financial platforms like Policybazaar in India to help borrowers understand their repayment obligations.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (INR)
\( r \) — Monthly interest rate (annual rate divided by 12)
\( n \) — Total number of monthly payments
\( PMT \) — Fixed monthly payment amount (INR)

Explanation: The formula accounts for compound interest over the loan term, spreading payments equally across all months.

3. Importance of Loan Calculation

Details: Accurate payment calculation helps borrowers budget effectively, compare loan offers, and understand the total cost of borrowing before committing to a loan.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage, and loan term in years. All values must be valid (principal ≥ 1000, interest rate > 0, term 1-30 years).

5. Frequently Asked Questions (FAQ)

Q1: What is Policybazaar?
A: Policybazaar is India's leading online financial marketplace that helps users compare and apply for personal loans, insurance, and other financial products.

Q2: Are there any prepayment charges?
A: Many Indian lenders charge 2-5% prepayment penalty if you repay the loan before completion. Check with your lender for specific terms.

Q3: What factors affect personal loan interest rates?
A: Rates depend on credit score, income, employment stability, loan amount, and tenure. Rates typically range from 10.5% to 24% p.a. in India.

Q4: How can I get the best personal loan rate?
A: Maintain a high CIBIL score (>750), compare multiple offers, negotiate with lenders, and consider shorter tenures for better rates.

Q5: What documents are needed for a personal loan?
A: Typically requires KYC documents, income proof (salary slips/bank statements), address proof, and employment details.