Personal Promissory Note Payment Formula:
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A personal promissory note is a legal document where one party promises to pay another party a definite sum of money, either on demand or at a specified future date, with interest. In India, these are commonly used for personal loans between individuals.
The calculator uses the standard loan payment formula:
Where:
Explanation: This formula calculates the fixed monthly payment required to fully repay a loan with interest over its term.
Details: Accurate payment calculation ensures both lender and borrower understand repayment terms, helps in financial planning, and ensures compliance with Indian lending laws.
Tips: Enter principal in INR, annual interest rate in percentage, and loan term in months. All values must be positive numbers.
Q1: Is this calculator specific to India?
A: While the formula is universal, this calculator uses INR currency and accounts for common Indian lending practices.
Q2: What's the maximum interest rate allowed in India?
A: As per RBI guidelines, interest rates should not exceed prevailing market rates. Currently, unsecured personal loans typically range between 10-24% p.a.
Q3: Are promissory notes legally binding in India?
A: Yes, under the Negotiable Instruments Act, 1881, properly executed promissory notes are legally enforceable.
Q4: Should stamp duty be paid on promissory notes?
A: Yes, in India promissory notes must be stamped as per the Indian Stamp Act. Rates vary by state.
Q5: Can this be used for business loans?
A: While the calculation is similar, business loans may have different terms and tax implications.