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 is the standard formula used by Commonwealth Bank and most financial institutions for fixed-rate personal loans.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for both principal and interest payments over the life of the loan, with payments remaining constant throughout the term.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also shows the total interest cost over the loan term.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate (without the % sign), 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. Current rates typically range from 6.99% to 19.99% p.a.

Q2: Are there any fees not included in this calculation?
A: This calculator doesn't account for establishment fees ($0-$250) or other potential charges. Check with Commonwealth Bank for complete fee details.

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 estimates only. Actual payments may vary based on specific loan terms and rounding methods.

Q5: What's the maximum loan term available?
A: Commonwealth Bank offers personal loan terms from 1 to 7 years, depending on the loan purpose and amount.