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, including both principal and interest. This is the standard formula used by Raiffeisen Bank and most financial institutions for fixed-rate loans.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (EUR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (EUR)

Explanation: The formula accounts for compound interest over the life of the loan, ensuring each payment covers both interest and principal reduction.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It also allows you to compare different loan offers and terms.

4. Using the Calculator

Tips: Enter the loan amount in EUR, annual interest rate as a percentage (e.g., 5.25), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include Raiffeisen Bank's fees?
A: This calculates base principal and interest only. Additional fees may apply - consult your loan agreement.

Q2: What's the difference between interest rate and APR?
A: APR includes fees and other loan costs, while the interest rate is just the cost of borrowing the principal.

Q3: Can I calculate payments for different frequencies?
A: This calculator assumes monthly payments. For weekly or biweekly payments, the formula would need adjustment.

Q4: How does extra payment affect my loan?
A: Extra payments reduce principal faster, saving interest and potentially shortening the loan term.

Q5: What if I have a variable rate loan?
A: This calculator assumes a fixed rate. Variable rate loans would require different calculations.