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Personal Loan Calculator Commonwealth Bank

Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

AUD
%
months

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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 Commonwealth Bank and most financial institutions for fixed-rate personal loans.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

Explanation: The formula accounts for both principal and interest payments over the loan term, with interest calculated on the remaining balance each month.

3. Importance of Loan Payment Calculation

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

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate (Commonwealth Bank's current rates), and loan term in months (typically 12-84 months for personal loans).

5. Frequently Asked Questions (FAQ)

Q1: What is Commonwealth Bank's current personal loan rate?
A: Rates vary (typically 6.99%-19.99% p.a. as of 2024) depending on credit score, loan amount, and term. Check their website for current rates.

Q2: Are there any additional fees?
A: Commonwealth Bank may charge an establishment fee (typically $150-$250) and monthly service fees. These aren't included in this calculation.

Q3: Can I make extra repayments?
A: Commonwealth Bank personal loans typically allow extra repayments without penalty, which can reduce total interest paid.

Q4: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but increase total interest.

Q5: Is this calculator accurate for all loan types?
A: This is for fixed-rate, fixed-term personal loans. It doesn't apply to credit cards, lines of credit, or variable-rate loans.

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