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 CommBank and other financial institutions for fixed-rate personal loans.

2. How Does the Calculator Work?

The calculator uses the personal loan payment formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (AUD)

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

3. Importance of Loan Payment Calculation

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

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What interest rates does CommBank offer?
A: CommBank personal loan rates vary (typically 6.99%-19.99% p.a.) depending on loan purpose, amount, term, and your credit profile.

Q2: Are there any fees?
A: CommBank may charge an establishment fee ($0-$250) and monthly service fees. These aren't included in this calculation.

Q3: Can I pay off my loan early?
A: Yes, CommBank allows extra repayments and early payout, which may reduce total interest paid.

Q4: How accurate is this calculator?
A: This shows estimated payments for fixed-rate loans. Actual offers may vary based on credit assessment.

Q5: What's the maximum loan term?
A: CommBank offers personal loan terms from 1-7 years (12-84 months).