1. What is the RACV Loan Payment Calculator?

The RACV Loan Payment Calculator helps you determine your monthly payment amount for a loan using the standard PMT formula. It calculates the fixed payment amount required to pay off a loan over a specified period at a given interest rate.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

• \( P \) — Principal loan amount (AUD)
• \( r \) — Periodic interest rate (decimal)
• \( n \) — Total number of payment periods

Explanation: The formula accounts for both principal repayment and interest charges over the life of the loan, calculating a fixed payment amount for each period.

3. Importance of Loan Payment Calculation

Details: Understanding your loan payments helps with financial planning, budgeting, and comparing different loan options. It ensures you can comfortably afford the repayments before committing to a loan.

4. Using the Calculator

Tips: Enter the loan amount in AUD, the periodic interest rate as a decimal (e.g., 0.05 for 5%), and the total number of payment periods. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I use annual or monthly rate?
A: Use the rate that matches your payment frequency. For monthly payments, divide the annual rate by 12.

Q2: Does this include fees and charges?
A: No, this calculates principal and interest only. Additional fees may apply to your actual loan.

Q3: What's the difference between PMT and P+I?
A: PMT is the total payment (principal + interest). Early in the loan, most of the payment goes toward interest.

Q4: Can I use this for other types of loans?
A: Yes, this works for any fixed-rate amortizing loan (car loans, personal loans, mortgages).

Q5: How accurate is this calculator?
A: It provides mathematically exact results for fixed-rate loans, assuming no missed payments.