1. What is the Westpac Car Loan Formula?

The Westpac Car Loan formula calculates the fixed monthly payment (PMT) required to repay a car loan over a specified term. It's based on the principal amount, annual interest rate, and loan duration.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment (AUD)
• \( P \) — Principal loan amount (AUD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, accounting for both principal and interest.

3. Importance of Loan Repayment Calculation

Details: Understanding your monthly payment helps with budgeting and ensures the loan is affordable. It also allows comparison between different loan options.

4. Using the Calculator

Tips: Enter the loan amount in AUD, annual interest rate as a percentage (e.g., 5.5 for 5.5%), 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 not included in this calculation.

Q2: How accurate is this calculator?
A: It provides a close estimate of monthly payments, but actual payments may vary slightly based on Westpac's specific terms.

Q3: What's the benefit of a shorter loan term?
A: Shorter terms typically have lower interest rates and less total interest paid, but higher monthly payments.

Q4: Can I make extra repayments?
A: Westpac generally allows extra repayments on variable rate car loans, which can reduce total interest and loan term.

Q5: How does a balloon payment affect this?
A: This calculator assumes full repayment. For loans with balloon payments, a different calculation is needed.