Personal Loan Calculator
Calculate monthly repayments and total cost for a personal loan. Compare secured vs unsecured loan options.
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
Frequently Asked Questions
What is the difference between secured and unsecured personal loans?
How does a personal loan affect my borrowing power?
What is Personal Loan?
A personal loan is money borrowed from a bank or lender that you repay in fixed instalments over a set period. Personal loans can be secured (backed by an asset like a car) or unsecured (no security required, but higher interest rates).
How this calculator works
The calculator uses the standard amortisation formula to compute monthly repayments based on your loan amount, interest rate, and term. The type toggle switches between secured (typically 6-10% rates) and unsecured (8-18% rates) with appropriate rate presets. The payment breakdown bar shows the split between principal and interest visually, and the total interest figure reveals the true cost of borrowing. Comparing different terms shows the trade-off: shorter terms mean higher monthly payments but significantly less total interest.
Secured vs Unsecured Loans
SECURED: backed by an asset (car, boat, equipment). Lower rates (6-10%) because lender can repossess if you default. Common for vehicle finance and large purchases. UNSECURED: no collateral. Higher rates (8-18% pa) reflecting greater lender risk. Most personal loans for travel, weddings, debt consolidation, home improvements are unsecured. Application is usually faster than secured.
When Personal Loans Make Sense
Debt consolidation: combining multiple high-rate debts (credit cards 22%) into a single lower-rate personal loan (10-15%) saves interest AND simplifies repayments. Large one-off purchase: cheaper than putting on credit card. Predictable repayments: fixed-term, fixed-rate = no rate-rise risk. Building credit score: successful repayment improves your credit file.
When to Avoid Personal Loans
(1) Lifestyle inflation — borrowing for holidays you can't afford to pay cash for. (2) Buying depreciating assets when you can wait and save. (3) Consolidating debt without addressing the underlying spending problem. (4) When the rate is similar to or higher than your existing debts (no benefit). (5) When fees + early repayment penalties wipe out savings.
Comparing Lenders
Always compare COMPARISON RATE (includes most fees) not just nominal rate. Online lenders (Plenti, Now Finance, MoneyMe) often beat traditional bank rates by 1-3%. Credit unions historically have the lowest rates for members. Check application fee ($0-$500), ongoing monthly fees ($0-$15), early repayment fees (most have none on variable-rate). Avoid 'payday loans' (>40% effective rates).
Loan Term Trade-offs
Longer term = lower monthly payment but more total interest. Example: $20,000 loan at 11%: 3-yr = $655/mo, total interest $3,580; 5-yr = $435/mo, total interest $6,100; 7-yr = $343/mo, total interest $8,800. Choose the shortest term you can comfortably afford. Most personal loans cap at 7 years; standard is 3-5 years.
Official Sources
All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.
Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.