1. What is the Personal Loan Repayment Formula?

The personal loan repayment formula calculates the fixed monthly payment required to repay a loan over a specified term. This is based on the principal amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan repayment 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 multiplied by 12)
• \( PMT \) — Monthly payment amount (AUD)

Explanation: The formula calculates the fixed payment required each month to pay off the loan over the specified term, including both principal and interest.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly repayment amount helps with budgeting and financial planning. It allows you to compare different loan options and choose one that fits your financial situation.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to NAB loans in India?
A: No, this is a general personal loan calculator based on standard repayment formulas. It's not specific to any particular bank or country.

Q2: What's included in the monthly payment?
A: The payment includes both principal and interest. It doesn't include any additional fees or insurance that might be part of your loan.

Q3: How does the loan term affect payments?
A: Longer terms result in smaller monthly payments but more total interest paid over the life of the loan.

Q4: Is the interest rate compounded monthly?
A: Yes, this formula assumes monthly compounding, which is standard for most personal loans.

Q5: Can I use this for other types of loans?
A: This formula works for any fixed-rate, fully amortizing loan (where you pay off the loan completely by the end of the term).