1. What is the Monthly Payment Formula?

The monthly payment formula calculates the fixed payment amount required to repay a business loan over a specified term, including both principal and interest components.

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 payments (term in years × 12)
• \( PMT \) — Monthly payment amount (AUD)

Explanation: The formula accounts for compound interest over the life of the loan, calculating a fixed payment that will completely amortize the loan by the end of the term.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with business cash flow planning, budgeting, and comparing different loan options.

4. Using the Calculator

Tips: Enter the principal amount in AUD, annual interest rate as a percentage (e.g., 5.25%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include Westpac's fees?
A: This calculates principal and interest only. Westpac may charge additional fees that would affect your total repayment amount.

Q2: What's the difference between variable and fixed rates?
A: Fixed rates remain constant for a set period, while variable rates can change. This calculator assumes a fixed rate for the entire term.

Q3: Can I calculate part-year terms?
A: Enter whole years only. For partial years, you may need to convert to months (e.g., 2.5 years = 30 months).

Q4: How accurate is this calculator?
A: It provides a good estimate, but actual loan terms may vary based on your credit assessment and Westpac's current offerings.

Q5: Can I calculate weekly or fortnightly payments?
A: This calculator shows monthly payments. Divide by 4.33 for weekly or 2.167 for fortnightly estimates.