1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed monthly payment required to repay a loan over a specified tenure. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (MYR)
• \( R \) — Monthly interest rate (annual rate ÷ 12)
• \( N \) — Loan tenure in months

Explanation: The formula calculates a fixed monthly payment that ensures the loan is paid off in full with interest by the end of the tenure.

3. Importance of Loan Repayment Calculation

Details: Understanding your repayment schedule helps with financial planning, comparing loan offers, and managing your monthly budget effectively.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between reducing balance and flat rate interest?
A: Reducing balance calculates interest on the outstanding principal, while flat rate calculates interest on the original principal for the entire tenure.

Q2: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: Can I prepay my Maybank personal loan?
A: Maybank typically allows prepayment but may charge a fee. Check with the bank for current policies.

Q4: Why does the interest portion decrease over time?
A: As you pay down principal, the interest is calculated on a smaller outstanding balance each month.

Q5: How accurate is this calculator?
A: This provides a close estimate, but actual loan terms may vary based on bank policies and fees.