1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates the fixed monthly payment (PMT) required to repay a loan over a specified period. This formula is used by UnionBank and other financial institutions to determine loan payments.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges, distributing payments equally over the loan term.

3. Importance of Loan Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitments and plan their budgets accordingly before taking a loan.

4. Using the Calculator

Tips: Enter loan amount in PHP, monthly interest rate as a decimal (e.g., 0.01 for 1%), and number of monthly payments. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly rate?
A: Divide the annual interest rate by 12. For example, 12% annual rate becomes 0.01 (1%) monthly rate.

Q2: Does this include insurance or other fees?
A: No, this calculates principal and interest only. UnionBank may charge additional fees not included here.

Q3: What's the typical loan term at UnionBank?
A: Personal loans typically range from 12 to 60 months, depending on the amount and borrower qualifications.

Q4: Can I prepay my UnionBank personal loan?
A: Yes, but check for prepayment penalties which would affect total interest paid.

Q5: How accurate is this calculator?
A: This provides an estimate. Actual payments may vary based on UnionBank's specific terms and rounding methods.