1. What is the FNB Loan Repayment Formula?

The FNB loan repayment formula calculates the fixed monthly payment (PMT) required to repay a loan over a specified term. This standard formula is used by First National Bank (FNB) and most other financial institutions in South Africa for fixed-rate loans.

2. How Does the Calculator Work?

The calculator uses the standard loan repayment formula:

Where:

• \( P \) — Principal loan amount (ZAR)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of monthly payments
• \( PMT \) — Fixed monthly payment amount (ZAR)

Explanation: The formula accounts for compound interest and spreads the repayment equally over the loan term.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures you can comfortably afford the loan. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter the principal amount in ZAR, annual interest rate as a percentage (e.g., 10.5 for 10.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include FNB's initiation and service fees?
A: No, this calculates only the principal and interest portion. FNB typically adds additional fees to the monthly payment.

Q2: What's the difference between fixed and variable rate loans?
A: Fixed-rate loans maintain the same interest rate throughout the term, while variable rates can change. This calculator is for fixed-rate loans.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total interest.

Q4: Can I use this for other South African banks?
A: Yes, the formula is standard across banks, though fees and specific terms may differ.

Q5: How accurate is this calculator?
A: It provides accurate estimates for standard fixed-rate loans, but actual FNB quotes may vary slightly due to rounding and specific bank policies.