Cara Kira Ansuran Pinjaman Peribadi — Formula, Examples + Free Calculator (2026)
Quick answer
There are two formulas — pick the one that matches your lender:
Or skip the math: use our free calculator.
Two lenders quoting "the same rate" can produce wildly different monthly payments — because Malaysian lenders use two different math conventions. Banks use reducing balance; many licensed moneylenders use flat rate. Knowing which one applies to your offer is the difference between budgeting accurately and being surprised by your monthly bill.
Reducing balance — the bank formula
Each month, interest is calculated on the OUTSTANDING balance, not the original loan. As you pay down the principal, the interest portion of each instalment shrinks and the principal portion grows. The monthly payment stays constant, but its composition shifts.
M = P × r × (1 + r)^n
─────────────────
(1 + r)^n − 1
P = principal (RM)
r = monthly rate (annual rate ÷ 12, decimal)
n = number of monthly instalments
M = monthly payment (RM)Flat rate — the moneylender formula
Interest is calculated on the ORIGINAL loan amount, multiplied by the annual rate, then by the number of years. The total interest is added to the principal and divided by the number of months. The same monthly payment, but the interest is heavier because it doesn't reduce as you pay down.
Total interest = P × annual_rate × years Monthly payment = (P + Total interest) ÷ months
A 6% flat rate over 5 years is roughly equivalent to a 11% reducing balance — the same monthly payment but charged on a frozen balance.
Worked examples
| Scenario | Monthly | Total interest | Total repayment |
|---|---|---|---|
| RM 5,000, 12 months, 15% (flat) | RM 479 | RM 750 | RM 5,750 |
| RM 10,000, 24 months, 15% (flat) | RM 542 | RM 3,000 | RM 13,000 |
| RM 10,000, 36 months, 6% (reducing balance) | RM 304 | RM 952 | RM 10,952 |
| RM 50,000, 60 months, 5% (reducing balance) | RM 944 | RM 6,614 | RM 56,614 |
Compare row 2 (flat) with row 3 (reducing) — same RM 10,000 principal, different formulas, very different total interest.
Quick affordability check
Whatever the formula gives, double-check against three thresholds before committing:
- 30-40% of take-home pay — Monthly payment alone should not consume more than this share of net income.
- DSR < 60% — Total monthly debt commitments (existing + new) ÷ gross income should stay under 60%.
- 6-month buffer — After paying the new instalment, you should still cover 6 months of essentials if income stops.
Want to skip the math? Use our calculator — set the amount, tenure, rate, and see all three numbers (monthly, total interest, total repayment) update in real time.
Frequently asked questions
What is the formula for personal loan installment?
Reducing balance: M = P × r × (1+r)^n / ((1+r)^n − 1) where P=principal, r=monthly rate (annual ÷ 12), n=number of months. Flat rate (common with moneylenders): Total interest = P × annual rate × years. Monthly = (P + Total interest) ÷ total months.
How does flat rate compare to reducing balance for the same headline rate?
A flat rate of X% is roughly equivalent to a reducing balance rate of 1.7-1.9× X% over typical 5-year tenures. Always convert before comparing offers.
Should I include processing fees in my calculation?
Yes if you want the true total cost. Add stamp duty (~0.5%, legally required) and processing fee (often 1-3%) to your principal before applying the formula. Or work in absolute Ringgit: total cost = monthly × months + upfront fees.
Why does the calculator default to a 3.5% rate?
That's an indicative bank rate. For licensed moneylender loans, set the rate to 12-18% per annum (within the legal cap). For specific bank products, get a written quote first.
How accurate is the formula vs the bank's actual offer?
The reducing-balance formula matches the bank's math exactly when given the same inputs. The actual offer may include rounding, additional fees, or a slightly different rate based on your credit profile.
Can I calculate without a calculator app?
For flat rate, yes — it's simple multiplication and division. For reducing balance, the (1+r)^n term needs a scientific calculator or our online tool. Most people use the tool.
Run the numbers, then apply.
Use our calculator to model amounts and tenures. Click Apply with the amount prefilled — no retyping. Decision in 24 hours.
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Amanah Best Credit Sdn Bhd (202301012345-D) is a licensed moneylender under the Moneylenders Act 1951 (Licence No: WL1234/5678). Interest rate: 12-18% per annum. Subject to terms, conditions and approval.