PERSONAL LOANS
Should you use a personal loan broker?
By Jared Mullane
How much will your personal loan repayments be?
Find out in seconds with our personal loan calculator by simply entering:
- The amount you want to borrow
- Your loan term (one to five years)
- The interest rate
- Any upfront fees, such as an application fee
Money.com.au data shows the average new personal loan in Australia is $17,493, borrowed over a three-year term. From more than 8,000 loan requests, over half (51.92%) were for debt consolidation, making it the most common reason to borrow. Other common personal loan purposes included purchasing a vehicle and financing home renovations.
Example of monthly personal loan repayments
Loan amount | $10,000 |
|---|---|
6% interest rate | $193 |
8% interest rate | $203 |
10% interest rate | $212 |
Loan amount | $20,000 |
6% interest rate | $387 |
8% interest rate | $406 |
10% interest rate | $425 |
Loan amount | $30,000 |
6% interest rate | $580 |
8% interest rate | $608 |
10% interest rate | $637 |
Loan amount | $50,000 |
6% interest rate | $967 |
8% interest rate | $1,014 |
10% interest rate | $1,062 |
Loan amount | $80,000 |
6% interest rate | $1,547 |
8% interest rate | $1,622 |
10% interest rate | $1,700 |
Loan amount | $100,000 |
6% interest rate | $1,933 |
8% interest rate | $2,028 |
10% interest rate | $2,125 |
| Loan amount | 6% interest rate | 8% interest rate | 10% interest rate |
|---|---|---|---|
$10,000 | $193 | $203 | $212 |
$20,000 | $387 | $406 | $425 |
$30,000 | $580 | $608 | $637 |
$50,000 | $967 | $1,014 | $1,062 |
$80,000 | $1,547 | $1,622 | $1,700 |
$100,000 | $1,933 | $2,028 | $2,125 |
How do lenders calculate personal loan interest?
Our calculator mirrors the way lenders calculate and charge interest on a personal loan. Interest is calculated daily on your current loan balance and charged monthly.
Here’s an example:
- Loan: $20,000 at a fixed rate of 7% p.a.
- Annual interest: $20,000 x 0.07 = $1,400
- Daily interest: $1,400 ÷ 365 = $3.84
- Monthly interest (31 days): $3.84 x 31 = $119.04
- This amount is added to your loan balance and repaid along with the principal
How personal loan repayment calculations work
Our personal loan calculator uses something called “amortisation” to work out your repayments. This just means your loan balance goes down over time as you pay it off.
Each repayment covers two things:
- Interest charged by the lender
- The amount you borrowed (the principal)
At the start, more of your repayment goes toward interest because your loan balance is higher. As the balance gets smaller, you pay less interest and more off the principal.
