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 interest. It's used for various SBM Mauritius loans including home and personal loans.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

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

3. Importance of Loan Calculation

Details: Accurate loan calculations help borrowers understand their repayment obligations, compare loan offers, and plan their finances effectively.

4. Using the Calculator

Tips: Enter the principal amount in MUR, annual interest rate as a percentage (e.g., 8.5 for 8.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of loans can this calculator be used for?
A: This calculator works for most fixed-rate loans including home loans, personal loans, and auto loans from SBM Mauritius.

Q2: Does this include insurance or other fees?
A: No, this calculates only the principal and interest portions. Additional fees or insurance would increase your total payment.

Q3: How does the interest rate affect my payment?
A: Higher rates significantly increase both your monthly payment and total interest paid over the life of the loan.

Q4: What's better - shorter term with higher payments or longer term with lower payments?
A: Shorter terms mean less total interest paid but higher monthly payments. Choose based on your monthly budget and long-term financial goals.

Q5: Can I calculate partial year terms?
A: This calculator uses whole years. For partial years, you'd need to convert to months (e.g., 3.5 years = 42 months).