Loan Calculator
Estimate monthly instalments & total payments
RM 1KRM 2M
0.1%20%
1 years35 years
Monthly Instalment
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Total Payment
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Total Interest
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Principal: —
Interest: —
Calculations are estimates only. Actual rates depend on the terms of your bank.
Loan Formula & Explanation
The loan calculator uses the amortisation formula to calculate monthly instalments for reducing-balance loans. The formula is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M: Monthly instalment, P: Principal amount, i: Monthly interest rate, n: Number of months.
Reducing-balance loans are commonly used for home loans, where interest is calculated on the outstanding balance. Flat-rate loans are commonly used for personal or vehicle loans.
Calculation Example
If you take out a loan of RM200,000 at an interest rate of 4.5% over 30 years:
- Monthly Instalment: RM1,013.37
- Total Repayment: RM364,813.20
- Total Interest: RM164,813.20
- Your monthly payment stays the same, but the principal portion increases each month while the interest portion decreases.
Frequently Asked Questions
What is the difference between reducing balance and flat rate?
Reducing balance calculates interest on the outstanding loan balance, reducing interest costs over time. Flat rate calculates interest on the original loan amount throughout the term.
Can I shorten my loan term?
Yes, by consistently making extra payments or restructuring your loan with the bank.
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