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 the standard formula used by CommBank Canada for personal loan calculations.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of monthly payments (term in years × 12)
• \( PMT \) — Monthly payment amount (AUD)

Explanation: The formula accounts for compound interest and ensures equal monthly payments throughout the loan term.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly payment helps with budgeting and financial planning. It allows you to compare different loan options and choose the most suitable one for your needs.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to CommBank Canada?
A: This calculator uses CommBank's standard loan calculation formula but results may vary slightly from actual loan offers.

Q2: Does this include loan fees?
A: No, this calculation doesn't include any upfront or ongoing fees that may apply to your loan.

Q3: Can I use this for other types of loans?
A: This is designed for fixed-rate personal loans. Other loan types may use different calculation methods.

Q4: How accurate is this calculator?
A: It provides a good estimate but actual loan terms may vary based on your creditworthiness and other factors.

Q5: What if I make extra payments?
A: Extra payments would reduce your total interest and potentially shorten your loan term, which isn't reflected in this basic calculation.