1. What is the Loan Amortization Schedule?

The amortization schedule shows the breakdown of each payment into principal and interest components over the life of a Westpac business loan. It helps borrowers understand how much of each payment reduces the principal balance versus paying interest.

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 ÷ 12)
• \( n \) — Total number of monthly payments
• \( PMT \) — Monthly payment amount (AUD)

Explanation: The formula calculates the fixed monthly payment required to fully repay the loan over its term, accounting for compound interest.

3. Importance of Amortization Schedule

Details: Understanding the amortization schedule helps businesses plan cash flow, assess the true cost of borrowing, and make informed decisions about early repayment or refinancing.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate (Westpac's current business loan rate), and loan term in years. The calculator will show the monthly payment and full amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between principal and interest?
A: Principal is the original loan amount borrowed, while interest is the cost of borrowing that amount.

Q2: Why does more interest get paid early in the loan?
A: Since interest is calculated on the outstanding balance, early payments have more interest because the balance is higher.

Q3: How can I reduce total interest paid?
A: Making additional principal payments or choosing a shorter loan term will reduce total interest.

Q4: Are Westpac business loan rates fixed or variable?
A: Westpac offers both fixed and variable rate business loans - check current offerings for details.

Q5: Does this include loan fees?
A: This calculator shows principal and interest only. Westpac business loans may have additional fees.