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, including interest. It's used by NAB Bank and other financial institutions to determine loan repayments.

2. How Does the Calculator Work?

The calculator uses the standard 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 the compounding interest over the life of the loan, spreading payments equally over each month.

3. Importance of Loan Calculation

Details: Understanding your monthly payments 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 (NAB's current rates), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What interest rates does NAB charge for personal loans?
A: NAB's personal loan rates vary (typically 6.99%-15.99% p.a.) depending on loan purpose, amount, and your creditworthiness.

Q2: Are there any fees not included in this calculation?
A: NAB may charge establishment fees ($150-$250) and monthly service fees ($10). These aren't included in the PMT calculation.

Q3: Can I make extra repayments on NAB personal loans?
A: Yes, NAB allows extra repayments on variable rate personal loans without penalty.

Q4: How accurate is this calculator?
A: It provides estimates based on fixed rates. Actual payments may vary with variable rates or fee changes.

Q5: What's the maximum loan term with NAB?
A: NAB offers personal loan terms from 1 to 7 years, with shorter terms typically having lower rates.