How a Personal Loan is Calculated

A personal loan—or any type of loan for that matter—is calculated by computing the interest or monthly payments (also called amortization or installment) on the loan. What you should compute for depends on the information you need.

What is Interest on a Personal Loan?

Interest is a fee that the lender charges you for using its money. It’s what you pay back on the loan, usually every month, on top of the borrowed amount. For the borrower, the interest is the cost of borrowing money. For the lender, it’s the profit they get from granting the borrower a loan.

How Interest is Calculated on a Personal Loan

The easy and precise way to compute an interest is to use an online loan calculator. But if you’d rather do it manually, here’s a formula[1] that shows how interest is calculated on a personal loan.

How to Compute Personal Loan Interest

Divide the interest rate (expressed as a decimal) by the number of repayments you’ll make throughout the loan term. For example, if your loan term is two years and you’ll make monthly payments, divide the interest rate by 24.Multiply the result by the balance of the loan. For the first repayment, the loan balance is equal to the entire principal amount.The resulting number is the amount of interest you’ll pay for the current month.

What is the Monthly Payment on a Personal Loan?

The monthly payment on a loan (also called amortization or monthly installment) is a set amount that the borrower is required to pay every month until the loan is paid off. Monthly payments cover the interest on the personal loan and the principal payment.

How to Calculate Monthly Payment on a Loan?

Monthly payment = a ÷ {[(1 + r)^n]-1} ÷ [r(1+r)^n]

How Loan Calculators Work

Loan calculators in the Philippines, which you can find on websites of loan providers, allow you to check how much you can borrow based on your monthly income or how much you’re going to pay off monthly based on your chosen loan amount and term.

How to Use a Personal Loan Calculator

Want to know how to calculate a loan? Simply go to the website of your bank of choice and look for its loan calculator. Computing your monthly repayments using a personal loan calculator is a straightforward process

Motorcycles 101: Do’s and Don’ts of Motorcycles for Beginners

Dubbed by many as the “King of the Road”, motorcycles have earned a reputation here in the Philippines with their sheer numbers, versatility, and dominance in the market. Whichever street you go, there is bound to be a few motorcycles that you encounter, sailing through the traffic. Motorcycles parked on the sidewalks by the dozens, or motorcycles as a preferred mode of transportation for goods, and people.

If you are looking to buying a motorcycle, making sure you have done extensive research on your part is a must. As of September 2024, here in the Philippines, an estimated number of 160,000 motorcycles are added into the already crowded streets per month. Being part of that ever growing number means being a responsible owner won’t result in accidents, tickets, or a nuisance to other motorists. Here are a few tips and ideas on how you can be a responsible first-time motorcycle owner:

First-Time Motorcycle Owners

If you are a first-time motorcycle owner, congratulations! Owning a motorcycle is an exciting experience that offers freedom, efficiency, and adventure. However, it also comes with responsibilities. Just like a car, a motorcycle needs to be taken care of and you, as its owner, must also follow safety guidelines and the laws in place to make sure that accidents will not happen.

Choose the Right Motorcycle – Start with a bike that matches your skill level, body size, and intended use. A lightweight and easy-to-handle motorcycle is best for beginners.
Wear Proper Gear – Always wear a helmet, gloves, jacket, riding pants, and boots for protection. Veer away from decorative gear that may hinder your view or hearing, and opt for sturdy gears instead.
Take a Safety Course – Learn proper riding techniques, especially if you're new to motorcycles.
Follow Traffic Rules and Road Etiquette – Observe speed limits, make sure to signal properly, and be extra cautious in heavy traffic.
Ride Defensively – Always assume that other drivers don’t see you, and ride with caution.
Check the Weather – Avoid riding in heavy rain or poor visibility conditions if you’re inexperienced.
Get Proper Insurance and Registration – Make sure your motorcycle is legally registered and that you have insurance coverage for protection.

Motorcycle Maintenance

A well-maintained motorcycle will run smoothly, and you won’t have to worry about being the cause of accidents. Make sure all parts of your motorcycle are in working order and if you are unsure, it doesn’t hurt to have it looked at by professionals. It may be time consuming at first, but having a motorcycle in good working order ensures that you wouldn’t have to worry about any internal issues.

Regular Oil Changes – Change the engine oil as per the manufacturer’s recommendations to keep the engine running smoothly.
Check Tire Pressure & Tread – Maintain proper tire pressure and check for wear and tear to avoid accidents.
Chain Lubrication & Tension – Keep the chain properly lubricated and ensure it’s not too loose or too tight.
Brake System Check – Inspect brake pads and fluid regularly to maintain your motorcycle’s stopping power.
Battery Maintenance – Keep terminals clean and ensure the battery is charged, especially if the bike is unused for long periods.
Lights & Signals – Regularly check that your headlights, brake lights, and turn signals are functioning properly.

Insert Photo - Motorcycle Safety Wear – PH Version

Motorcycle Laws in the Philippines

Motorcycle laws play a crucial role in ensuring road safety, regulating traffic, and protecting riders, passengers, and pedestrians. Enforcing clear regulations help reduce accidents, manage traffic flow, and promote responsible riding. Realistically, accidents will and are bound to happen due to mechanical error or some human error, but knowing the laws allow motorists, especially first-time owners, to be knowledgeable in what the laws encompass.

One of the most important laws is Republic Act 10054, known as the Mandatory Helmet Law, which requires all motorcycle riders and passengers to wear a DTI-certified helmet. This law significantly reduces the risk of head injuries in accidents. Another essential regulation is the Children’s Safety on Motorcycles Act (RA 10666), which prohibits children from riding motorcycles unless they can reach the foot pegs and wear proper safety gear. This prevents serious injuries among young passengers.

Traffic discipline is another reason why motorcycle laws are essential. The Anti-Distracted Driving Act ensures that riders keep their full attention on the road by prohibiting the use of mobile phones while driving. The Doble Plaka Law (RA 11235) mandates bigger and more visible license plates to prevent crimes committed using motorcycles, such as "riding-in-tandem" robberies.

Motorcycle Loans

With purchasing your first motorcycle comes the question of finance stability. Motorcycle loans here in the Philippines provide an affordable financing option for individuals looking to purchase a motorcycle without paying the full price upfront. These types of loans are offered by banks, lending institutions, and dealerships, which allows you to pay in monthly installments with flexible terms ranging from 12 to 48 months.

For first-time owners, loans can offer you affordable and safer motorcycles with modern safety features. This reduces the temptation to purchase second-hand, high-risk, or unreliable bikes. Many loan providers also include insurance packages, offering financial protection in case of accidents or theft.

Here is a short list of banks that offer motorcycle loans that may suit your needs:

For years, motorcycles have been touted as a better alternative for transportation, allowing motorists to weave through traffic with its smaller appearance, lesser required fuel than it’s four-wheel counterparts, and the various bustling pubic transportations available. Owning a motorcycle isn’t just for personal travels nowadays, but it has become an essential part of the workforce as well. With companies that offer motorcycles as courier services (J&T, Flash), to online shopping platforms (Shein, Lazada, Shopee) and even for food delivery platforms (GrabFood, Foodpanda).

With the ever-growing number of motorcycles being used here in the Philippines, you must stay vigilant in making sure your maintenance, license, and documents are up to date. The reputation of being “King in the Road” has its own sets of challenges, but with it also comes the reasons why more and more Filipinos find motorcycles more reliable and essential.

Photo Links

Motorcycle photo 1

Motorcycle Safety Wear – PH Version