1. What is the CBA Personal Loan Formula?

The Commonwealth Bank of Australia (CBA) personal loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term. This formula accounts for both principal and interest components of the repayment.

2. How Does the Calculator Work?

The calculator uses the CBA personal loan formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of monthly payments
• \( PMT \) — Monthly repayment amount (AUD)

Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, with earlier payments weighted more toward interest and later payments more toward principal.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly repayment helps with budgeting and ensures the loan is affordable. It also allows comparison between different loan options.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate (without % sign), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include CBA's loan fees?
A: No, this calculates principal and interest only. CBA may charge additional establishment or monthly fees.

Q2: How accurate is this calculator?
A: It provides the exact mathematical calculation, but your actual repayment may differ slightly due to rounding or specific loan terms.

Q3: Can I use this for other types of loans?
A: This formula works for any fixed-rate, fully-amortizing loan, but specific terms may vary by product.

Q4: What if I make extra repayments?
A: Extra payments reduce the principal faster, potentially saving interest and shortening the loan term.

Q5: How does interest rate affect repayments?
A: Higher rates increase monthly payments and total interest paid. Even small rate differences can have significant long-term impacts.