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Loan Repayment Formula:
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The home loan repayment formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest components. This is based on standard amortization calculations.
The calculator uses the loan repayment formula:
Where:
Explanation: The formula accounts for compound interest over the life of the loan, calculating a fixed payment that covers both interest and principal reduction each month.
Details: Understanding your monthly repayment helps with budgeting and financial planning. It allows you to compare different loan options and terms.
Tips: Enter the principal amount in AUD, annual interest rate as a percentage (e.g., 5.25), and loan term in years. All values must be positive numbers.
Q1: Does this calculator include fees and charges?
A: No, this calculates principal and interest only. Actual loan repayments may include additional fees and charges.
Q2: How does the interest rate affect my repayment?
A: Higher interest rates increase your monthly payment. A small rate change can significantly impact total repayment over the loan term.
Q3: What's better - shorter term with higher payments or longer term with lower payments?
A: Shorter terms mean higher payments but less total interest paid. Longer terms have lower payments but higher total interest costs.
Q4: Can I make extra payments to reduce my loan term?
A: Most loans allow extra payments which reduce principal and can shorten your loan term, but check your specific loan terms.
Q5: Is this calculator specific to Commbank Philippines?
A: This uses standard loan calculation formulas and is not specific to any particular bank or country.