Commonwealth Bank Personal Loan Calculator

Personal Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

Unit Converter ▲

Unit Converter ▼

From:	To:

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 loan repayments.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

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

Explanation: The formula accounts for both principal and interest payments over the life of the loan, with payments being equal each month.

3. Importance of Loan Calculation

Details: Understanding your monthly payments helps with budgeting and financial planning. It allows you to compare different loan options and choose the most suitable one for your needs.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate in percentage, and loan term in years. Commonwealth Bank personal loans typically range from 1 to 7 years with competitive interest rates.

5. Frequently Asked Questions (FAQ)

Q1: What are typical Commonwealth Bank personal loan rates?
A: Rates vary based on creditworthiness but typically range from 6.99% to 19.99% p.a. for secured loans (as of 2023).

Q2: Are there any fees associated with the loan?
A: Commonwealth Bank may charge an establishment fee (typically $150-$250) and monthly service fees. These are not included in this calculation.

Q3: Can I make extra repayments?
A: Commonwealth Bank generally allows extra repayments on variable rate personal loans without penalty.

Q4: How does loan term affect total interest?
A: Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but increase total interest paid.

Q5: Is this calculator accurate for all loan types?
A: This is designed for standard fixed-rate personal loans. Other products like lines of credit or variable rate loans may use different calculations.