1. What is the PMT Formula?

The PMT (Payment) formula calculates the fixed monthly payment required to repay a loan over a specified term. It's the standard formula used by Union Bank Philippines and other financial institutions for personal loan calculations.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges, with more interest paid earlier in the loan term.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in PHP, annual interest rate (Union Bank's current rates), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are Union Bank's current personal loan rates?
A: Rates vary (typically 10-24% p.a.) based on credit score, loan amount, and term. Check Union Bank's website for current offers.

Q2: Are there other fees besides interest?
A: Union Bank may charge processing fees (1-3% of loan amount) and late payment fees. These aren't included in this calculation.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: Can I prepay my Union Bank loan?
A: Yes, but check for prepayment penalties. Early repayment reduces total interest paid.

Q5: How accurate is this calculator?
A: It provides estimates based on the formula. Actual loan terms may vary based on your credit profile and bank policies.