RAC Car Loan Repayment Calculator Extra Payments

Loan Payment Formula:

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

Principal Amount (P):

AUD

Annual Interest Rate:

% p.a.

Loan Term:

years

Extra Monthly Payment:

AUD

Monthly Payment (PMT):

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1. What is the RAC Car Loan Calculator?

The RAC Car Loan Repayment Calculator estimates your monthly payments for RAC car loans, accounting for extra payments. RAC loans typically have interest rates between 5.69% and 8.99% p.a. This calculator helps you understand how extra payments can reduce your loan term and total interest.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

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

Where:

\( P \) — Principal loan amount (AUD)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Number of months in loan term
\( PMT \) — Monthly payment amount (AUD)

Extra Payments: The calculator adjusts the amortization schedule to show how additional payments reduce both the loan term and total interest paid.

3. Importance of Loan Calculation

Details: Understanding your loan payments helps with budgeting and shows the significant savings possible through extra payments. Even small additional amounts can substantially reduce your loan term.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate (typically 5.69-8.99% for RAC loans), loan term in years, and any planned extra monthly payments. All values must be valid (positive numbers).

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on the loan amount, term, and extra payment amount. Even AUD 50-100 extra per month can save thousands in interest and reduce the term by years.

Q2: Are there penalties for extra payments on RAC loans?
A: RAC loans typically don't charge penalties for extra payments, but check your specific loan terms.

Q3: Should I shorten the term or make extra payments?
A: Extra payments offer more flexibility as you can reduce them if needed, while a shorter term has fixed higher payments.

Q4: How does interest rate affect payments?
A: Higher rates significantly increase total interest paid. At 8.99%, you'll pay much more over the loan term than at 5.69%.

Q5: Can I use this for other loans?
A: While designed for RAC car loans, the calculator works for any fixed-rate loan. Just input the correct interest rate and terms.