1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term at a given interest rate. This is the standard formula used by FNB and other financial institutions for loan applications.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Calculation

Details: Accurate loan payment calculation is crucial for financial planning, budgeting, and comparing different loan options before applying.

4. Using the Calculator

Tips: Enter principal amount in ZAR, annual interest rate (up to prime + 17.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the maximum interest rate FNB charges?
A: FNB personal loan rates typically range up to prime + 17.5%, depending on credit profile and loan type.

Q2: Are there additional fees on FNB loans?
A: Yes, there may be initiation fees and monthly service fees that aren't included in this calculation.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q4: Can I pay off my loan early?
A: Yes, but early settlement fees may apply depending on the loan agreement.

Q5: Is this calculation accurate for all FNB loans?
A: This provides an estimate for standard personal loans. Specialized loans may use different calculations.