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How Personal Loan Repayments Are Calculated
Personal loan repayments are calculated using standard loan amortisation. Each repayment covers both interest (calculated on the remaining balance) and principal (the amount that reduces your debt). The comparison rate bundles the interest rate and all fees into a single figure so you can compare loans fairly.
This calculator uses standard loan amortisation to compute your monthly repayment. Each repayment covers the interest charged on the outstanding balance that month, plus a fixed portion of principal. Because the balance falls over time, the interest component of each payment also falls — but since the total repayment stays constant, more of each later payment goes toward paying off principal.
Personal loan interest rates in Australia typically range from 6% to 25% per annum depending on the lender, your credit score, and whether the loan is secured or unsecured. Secured loans (backed by an asset like a car) attract lower rates than unsecured loans. Comparison rates include fees and charges and give a more accurate picture of the true cost.
The loan term significantly affects the total cost. A $20,000 loan at 10% over 3 years costs around $3,230 in total interest. Extend that to 5 years and total interest rises to $5,360 — even though the monthly repayment is lower. Shorter terms cost more per month but substantially less overall.
This calculator does not include establishment fees, monthly account-keeping fees, or early repayment penalties, which can add hundreds to the total cost of a loan. Always compare the comparison rate (not just the interest rate) when evaluating loan offers from different lenders.
What is a good interest rate for a personal loan in Australia?
As of 2026, personal loan rates in Australia typically range from around 6% p.a. for secured loans with banks and credit unions, up to 20–25%+ for unsecured loans through online lenders. Rates below 10% p.a. are generally considered competitive for unsecured personal loans. Your rate will depend on your credit score, income, and the lender's risk assessment.
What is the difference between the interest rate and comparison rate?
The interest rate is the base rate used to calculate interest on your loan balance. The comparison rate includes the interest rate plus most fees and charges, expressed as a single annual percentage. ASIC requires lenders to display comparison rates based on a standard $30,000 loan over 5 years so consumers can compare products fairly. Always compare loans using the comparison rate, not just the headline rate.
How much can I borrow with a personal loan in Australia?
Most Australian lenders offer personal loans from $2,000 up to $50,000, with some lenders going up to $100,000 for secured loans. How much you can borrow depends on your income, existing debts, credit history, and the lender's serviceability assessment. Lenders must also comply with responsible lending obligations under ASIC guidelines.
Can I pay off a personal loan early in Australia?
Yes, but check for early repayment fees (also called break costs or exit fees). Fixed-rate personal loans often charge a fee if you pay off the loan ahead of schedule, as the lender loses expected interest income. Variable rate loans are more likely to allow extra repayments without penalty. Always check the loan's product disclosure statement before signing.
What fees do Australian personal loans typically charge?
Common fees include: establishment fees ($0–$600 typically), monthly account fees ($0–$15/month), late payment fees ($15–$35 per missed payment), and early exit fees (variable). Many online lenders now offer fee-free loans, which can make a significant difference to the total cost. Always factor fees into your comparison using the comparison rate.
Does applying for a personal loan affect my credit score?
Yes. A formal loan application triggers a "hard enquiry" on your credit file, which can temporarily lower your credit score by a few points. Multiple applications in a short period can have a larger negative effect and signal financial stress to lenders. Many lenders now offer a "soft check" or rate estimate without affecting your credit score, so check for this option before applying formally.