Personal loan repayment calculator

Make plans with personal loan calculators

Every now and again we all need that little bit extra to cover an unexpected cost or a bit of a treat. Whether you need help with bills or some spare cash to update your garden, a personal loan is the answer - so long as you have planned how you will repay it.

If you're about to organise a loan or to check on the health of your current personal loan, the personal loan repayments calculator above could help. Insert how much you wish to borrow, the term over which you'd like to pay it back, and your interest rate and the personal loan calculator will let you know what your repayments will be. Once you've got your plan in mind, you can link through to compare personal loans using Mozo's great database of personal loan providers.

Understanding how personal loan repayments work

If you’re looking to take out a personal loan before you make a loan application, it’s important to know what factors could affect your repayments and therefore what features you should look for in a loan. It isn’t just about doing loan calculations so that you can see how much you could borrow. It is also about understanding how interest is calculated, what types of interest rate choices you have as well as deciding on the best loan term. Below we’ll answer some of the most frequently asked questions to help.

Does the length of my loan term matter?

The time you’ll need to pay off your personal loan is going to vary depending on the size of your personal loan, your budget and the interest rate of the loan. Beware that the longer the loan term, the more interest you’ll be accumulating. When selecting a loan term, you’ll need to think about what your finances might look like in the future. Try to pay off your personal loan in as short a time as possible, without stretching your finances too thin. Use our repayments calculator to test out different loan terms to see what works best for you.

One thing to remember is that most lenders and banks that operate in Australia allow you to make extra repayments on personal loans without penalty, which means that if you have extra funds available you can use this to pay down your loan faster than the initial loan term. Even if you take out a fixed rate personal loan you’ll usually be able to make additional payments, though the amount might be capped.   

What is the true cost of a personal loan?

When deciding on a personal loan it’s worth considering not just the interest rate and the loan term but all the fees involved. When comparing personal loans you’ll see what’s called a comparison rate. 

The comparison rate is calculated by including interest rate but also the fees and added charges included for that personal loan, showing you the real cost of the loan. You should use this rate when you are comparing your personal loan product options between banks. Don’t just rely on the headline rate when doing a side-by-side comparison.

How is interest calculated on a personal loan?

For most variable rate personal loans interest is calculated on the unpaid daily balance of your loan. This interest is charged to the loan on a monthly basis and included in your monthly repayment. The interest rate applied each day is equal to the annual interest rate of the loan at the time, divided by 365 (the number of days in a year. To learn more see you Calculate interest on a loan guide.

Why do personal loans products have a range of interest rates available?

The personal loan market in Australia has what is known as risk-based pricing structures. This means that the lender will tailor the interest rate of the loan to the borrower based on their credit history. Personalised interest rates are becoming increasingly common and it is a way that banks and lenders reward customers for good financial management.   

There’s a big difference between paying 7.79% or 25.74% interest, so before you apply for a personal loan it is a good idea to check your credit score. Mozo’s Rate Matcher tool will give you an indication of the rates you’ll likely qualify for.

How are personal loan fees calculated?

There are two types of fees on personal loan. One off fees and ongoing fees. Here’s a summary of the most common fees.

• Breakcost fees: If you choose to get a fixed rate personal loan and you decide to pay the loan out early, you may need to pay a break cost fee. This fee is calculated on a variety of factors, including the rate of your loan and the amount of time left on the term. If you’ve chosen a variable rate loan the good news is that exit fees have been banned for variable rate loans for quite some time so you don’t need to worry about this fee. 
  

• Late payment fee: If you fail to make a repayment on your loan by the due date some lenders will charge you a fee. Generally this fee is a flat amount and not calculated on a percentage of the loan amount. The best way to avoid paying this fee is by setting up direct debit. If you’re worried you might fail to meet repayments on time, it’s best to get in touch with the lender immediately as you might be able to get an extension or fee waiver. 
  

• Ongoing fees: Don’t underestimate the cost of ongoing fees because they add up over the life of a loan. An ongoing monthly fee of $10 might not seem like much but when you calculate it over a period of 5 years that’s a total of $600.
  

• Upfront fee: Generally when you apply for a personal loan you’ll be charged a one off upfront fee sometimes called an application or loan establishment. This fee will vary between $0-$600 depending on the lender and is usually to cover admin costs to set up the loan. If a personal loan you’re considering has a high upfront fee, ensure the interest rate and other fees make up for this upfront expense.
  

What’s the difference between a secured or unsecured personal loan?

Secured loans are when you borrow money and you secure the loan against an asset such as a home or car. Secured loans usually come with lower interest rates than an unsecured loan because the lender would, in the event that you can’t pay back the loan, have the option to sell your asset to make up for the repayments you still owe. 

What other personal loan calculators are there?

Along with this tool for calculating loan repayments, we also offer a Switch & Save Personal Loan Calculator and a Personal Loan Comparison Calculator.

Switch & Save Personal Loan Calculator: This can be used to calculate the difference moving to a different personal loan could make. It contrasts current repayments and interest rates with the other options available to you in your state.

Personal Loan Comparison Calculator: Explore the difference between your options with this calculator. Enter in the loan amount and term of the loan, as well as the details from two comparable options - interest rates and applicable fees. This calculator can help you track how each option could perform over time.