1. What is the PMT Formula?

The PMT (Payment) formula calculates the fixed monthly payment required to repay a loan over a specified term at a constant interest rate. It's the standard formula used by banks for amortizing loans.

2. How Does the Calculator Work?

The calculator uses the PMT formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest.

3. Importance of Credit Score

Details: Your credit score significantly impacts the interest rate you qualify for. Higher scores (720+) get the best rates, while lower scores (below 640) pay substantially higher interest.

4. Using the Calculator

Tips: Enter the loan amount in ZAR, select the repayment term in months (6-84), and choose your credit score range. The calculator will show your estimated monthly payment.

5. Frequently Asked Questions (FAQ)

Q1: What are Standard Bank's current interest rates?
A: Rates vary by credit score (9.5%-17.5% as of 2023). Excellent credit gets ~9.5%, poor credit ~17.5%.

Q2: What loan terms are available?
A: Standard Bank offers personal loans from 6 months to 7 years (84 months).

Q3: How does credit score affect my payment?
A: A ZAR 50,000 loan over 3 years costs ~ZAR 1,600/month at 9.5% (excellent credit) vs ~ZAR 1,850/month at 17.5% (poor credit).

Q4: Are there any fees not included?
A: This calculator shows principal + interest only. Standard Bank may charge initiation and service fees (typically 1-2% of loan amount).

Q5: Can I pay extra to reduce interest?
A: Yes, Standard Bank allows early repayment, which reduces total interest paid. There may be a small early settlement fee.