1. What is the RBC Car Loan Payment Formula?

The RBC car loan payment formula calculates the fixed monthly payment required to repay a car loan over a specified term. It accounts for the principal amount, annual interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment (CAD)
• \( P \) — Principal loan amount (CAD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, accounting for both principal and interest.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and ensures you can comfortably afford the vehicle without financial strain.

4. Using the Calculator

Tips: Enter the total loan amount (after any down payment), the annual interest rate offered by RBC, and the loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include taxes and fees?
A: No, this calculates only the principal and interest payment. Additional costs like sales tax, registration, or insurance are not included.

Q2: What's a typical RBC car loan rate?
A: Rates vary based on creditworthiness, loan term, and vehicle age. As of 2023, RBC rates typically range from 5.99% to 19.99% APR.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: Are there prepayment penalties?
A: RBC generally allows prepayments without penalty, but check your specific loan agreement for details.

Q5: How accurate is this calculator?
A: This provides a close estimate, but your actual payment may vary slightly due to rounding or specific loan terms from RBC.