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 People's Choice Credit Union and most Australian lenders for 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 ÷ 100)
• \( n \) — Total number of payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (AUD)

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

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also allows comparison between different loan offers.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate as a percentage (e.g., 7.5 for 7.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include People's Choice Credit Union fees?
A: This calculates principal and interest only. Additional fees may apply - check with People's Choice for exact fees.

Q2: What's the typical interest rate for People's Choice personal loans?
A: Rates vary based on creditworthiness and loan terms, typically ranging from 6% to 20% p.a. (as of 2023).

Q3: Can I make extra repayments on People's Choice loans?
A: Most People's Choice personal loans allow extra repayments without penalty, but check your specific loan terms.

Q4: How does loan term affect total interest paid?
A: Longer terms reduce monthly payments but increase total interest paid over the life of the loan.

Q5: Is this calculator specific to Australia?
A: Yes, this is designed for People's Choice Credit Union personal loans in Australia using AUD currency.