1. What is the RACQ Loan Payment Formula?

The RACQ loan payment formula calculates the fixed monthly payment (EMI) required to repay a loan over a specified term. This formula is used for various RACQ loan products including car loans and personal loans with typical interest rates ranging from 5.69% to 12.99% p.a.

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 months)
• \( PMT \) — Monthly payment amount (AUD)

Explanation: The formula accounts for both principal and interest components of each payment, with interest being front-loaded in the repayment schedule.

3. Importance of Loan Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different loan options. It also shows the total cost of borrowing through the interest component.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate (typical RACQ rates 5.69-12.99%), and loan term in years. The calculator will show monthly payment, total repayment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: What types of RACQ loans can this calculator be used for?
A: This calculator works for fixed-rate personal loans, car loans, and other installment loans from RACQ.

Q2: Are RACQ loan rates fixed or variable?
A: This calculator assumes fixed rates. For variable rate loans, payments may change over time.

Q3: Does this include RACQ fees and charges?
A: The calculation doesn't include establishment fees or monthly account fees which may apply to your loan.

Q4: Can I calculate part-time repayments?
A: This calculator assumes monthly payments. For fortnightly or weekly payments, divide the monthly amount accordingly.

Q5: How accurate is this calculator?
A: It provides a close estimate but your actual payment may differ slightly due to rounding or specific loan terms.