1. What is the Personal Loan Payment Formula?

The personal loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term. This formula is used by Commonwealth Bank and other financial institutions to determine regular repayment amounts.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Explanation: The formula accounts for both principal repayment and interest charges over the life of the loan.

3. Importance of Loan Payment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan repayments before committing to a loan agreement.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate as a percentage (e.g., 9.5 for 9.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What interest rates does Commonwealth Bank offer?
A: Rates vary based on creditworthiness, loan amount, and term. Check Commonwealth Bank's website for current rates.

Q2: Are there any additional fees?
A: Commonwealth Bank may charge establishment fees or other charges. These are not included in this calculation.

Q3: Can I make extra repayments?
A: Commonwealth Bank personal loans typically allow extra repayments without penalty, which can reduce total interest.

Q4: How accurate is this calculator?
A: This provides an estimate. Actual payments may vary slightly due to rounding or specific bank policies.

Q5: What's the maximum loan term available?
A: Commonwealth Bank offers personal loans with terms typically ranging from 1 to 7 years.