1. What is CommBank Personal Loan Borrowing Power?

The CommBank Personal Loan Borrowing Power calculator helps you determine how much you can borrow based on your affordable monthly payments, interest rate, and loan term. This calculation follows Commonwealth Bank's standard personal loan formula.

2. How Does the Calculator Work?

The calculator uses the CommBank personal loan formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( PMT \) — Affordable monthly payment (AUD)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Loan term in months

Explanation: The formula calculates the maximum loan amount you can borrow based on what you can afford to pay each month, the interest rate, and the loan duration.

3. Importance of Borrowing Power Calculation

Details: Understanding your borrowing power helps you plan your finances better and ensures you don't overcommit to loan payments you can't afford.

4. Using the Calculator

Tips: Enter your comfortable monthly payment amount in AUD, the annual interest rate (%), and the loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to the Philippines?
A: No, this uses CommBank's standard personal loan formula but can be used as a general reference for personal loan calculations.

Q2: What's a typical interest rate for personal loans?
A: Rates vary but typically range from 5% to 20% depending on creditworthiness and loan terms.

Q3: How does loan term affect borrowing power?
A: Longer terms increase borrowing power but result in more total interest paid over the life of the loan.

Q4: Are there other factors that affect actual loan approval?
A: Yes, lenders also consider credit score, income, existing debts, and other financial factors.

Q5: Should I borrow the maximum amount calculated?
A: Not necessarily. Consider your overall financial situation and potential future expenses before borrowing.