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. It's widely used by banks and financial institutions in Malaysia to determine loan repayments.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

• \( PMT \) — Monthly payment (MYR)
• \( PV \) — Loan amount (MYR)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula accounts for compound interest and spreads payments evenly over the loan term.

3. Importance of Loan Calculation

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

4. Using the Calculator

Tips: Enter loan amount in MYR, annual interest rate in percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for personal loans in Malaysia?
A: Rates typically range from 3% to 18% annually, depending on credit score, loan amount, and tenure.

Q2: Are there other fees besides interest?
A: Yes, there may be processing fees (1-3% of loan amount), stamp duty, and late payment charges.

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 loan?
A: Most banks allow prepayment but may charge an early settlement fee (typically 1-3% of outstanding balance).

Q5: What's the maximum loan tenure in Malaysia?
A: Personal loans typically have maximum tenures of 5-10 years, depending on the bank and loan purpose.