Calculate monthly repayments, total interest, and full amortisation for any Australian loan — personal, car, business, or other.
| Item | Value |
|---|
All standard Australian loan repayments use the amortising loan formula. Each payment covers two components: interest on the outstanding balance, and principal reduction. In early periods, most of each payment is interest; as the balance reduces, an increasing share goes to principal.
| Loan Type | Typical Rate | Term | Security |
|---|---|---|---|
| Home loan (variable, P&I) | 6.3–7.0% | 25-30 years | Property |
| Car loan (secured) | 6–9% | 2-7 years | Vehicle |
| Personal loan (unsecured) | 9–17% | 1-7 years | None |
| Business loan (unsecured) | 9–25% | 1-5 years | None/Director guarantee |
| Credit card | 17–23% | Revolving | None |
| Loan Amount | Rate | 3-Year Term | 5-Year Term | 7-Year Term | Extra Interest (7yr vs 3yr) |
|---|---|---|---|---|---|
| $25,000 | 10% | $807/mo | $4,052 interest | $531/mo | $6,860 interest | $415/mo | $9,860 interest | $5,808 more |
| $50,000 | 8% | $1,567/mo | $6,412 interest | $1,014/mo | $10,840 interest | $779/mo | $15,436 interest | $9,024 more |
What is the loan repayment formula?
Monthly payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). For example: $25,000 at 9% over 5 years: r = 0.09/12 = 0.0075; n = 60; payment = $519/month.
What is the difference between the interest rate and comparison rate?
The interest rate is the base borrowing cost. The comparison rate (legally required to be displayed in Australia) adds most fees into a single annual percentage, showing the true cost. A loan at 8.9% interest with a $500 establishment fee may have a comparison rate of 10.2%. Always compare comparison rates when shopping for loans.
How do extra loan repayments work?
Extra repayments on variable loans reduce the outstanding principal immediately, reducing the interest charged in subsequent periods and shortening the loan term. Even $100/month extra on a $25,000 personal loan at 10% over 5 years saves approximately $800 in interest and cuts 8 months off the loan.
Can I pay off a personal loan early in Australia?
Most variable personal loans allow early repayment without penalty. Fixed-rate personal loans may charge an early exit fee — check your contract for 'early repayment' or 'break cost' terms. Always request a written payout figure from your lender before making the final payment.