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, including interest. This is the standard formula used by Seylan Bank and most financial institutions for personal loans.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan before committing. It also allows comparison between different loan offers.

4. Using the Calculator

Tips: Enter the principal amount in LKR, annual interest rate (as offered by Seylan Bank), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What interest rates does Seylan Bank offer for personal loans?
A: Rates vary based on creditworthiness and market conditions. Check with Seylan Bank for current rates (typically 12%-18% p.a. for personal loans).

Q2: Are there any additional fees?
A: Seylan Bank may charge processing fees or other charges. These are not included in this calculation.

Q3: Can I prepay my loan?
A: Seylan Bank may allow prepayment with possible charges. Check their terms for details.

Q4: What if I miss a payment?
A: Late payments typically incur penalties and may affect your credit score.

Q5: How accurate is this calculator?
A: This provides an estimate of monthly payments. Actual payments may vary slightly due to rounding or bank-specific policies.