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 by Sampath Bank and other financial institutions in Sri Lanka for personal loans.

2. How Does the Calculator Work?

The calculator uses the personal loan payment formula:

Where:

• \( P \) — Principal loan amount (LKR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of monthly payments
• \( PMT \) — Monthly payment amount (LKR)

Explanation: The formula accounts for both principal and interest payments over the loan term, with interest being compounded monthly.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan. It also allows you to compare different loan options.

4. Using the Calculator

Tips: Enter the principal amount in LKR, annual interest rate in percentage, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for Sampath Bank personal loans?
A: Interest rates vary but typically range from 12% to 18% per annum depending on creditworthiness and loan terms.

Q2: Are there any additional fees?
A: Sampath Bank may charge processing fees or other charges. Consult with the bank for exact fee structures.

Q3: What is the maximum loan term available?
A: Sampath Bank typically offers personal loans with terms up to 5 years (60 months), but this may vary.

Q4: Can I prepay my loan?
A: Most banks allow prepayment, but there may be prepayment charges. Check with Sampath Bank for their specific policy.

Q5: How accurate is this calculator?
A: This provides an estimate. For exact figures, consult with Sampath Bank as actual terms may vary based on your profile.