1. What is the Westpac Loan Repayment Formula?

The Westpac loan repayment formula calculates fixed monthly payments for personal loans. It's based on the standard amortization formula used by many financial institutions.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

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

Explanation: The formula accounts for compound interest over the life of the loan, spreading payments evenly across all periods.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan options. It shows the true cost of borrowing.

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 Westpac Canada?
A: While based on Westpac's standard formula, this calculator provides general estimates and may not reflect actual bank offers.

Q2: Does this include fees or insurance?
A: No, this calculates principal and interest only. Actual loan payments may include additional fees.

Q3: How does the interest rate affect payments?
A: Higher rates significantly increase both monthly payments and total interest paid over the loan term.

Q4: What's better - shorter or longer loan terms?
A: Shorter terms mean higher monthly payments but less total interest. Longer terms reduce monthly payments but cost more overall.

Q5: Can I make extra payments?
A: Most loans allow extra payments which reduce total interest, but check your specific loan terms.