Australian borrowing guide
Australian personal-loan repayment planning
Understand how loan amount, interest rate, term and extra payments affect a personal-loan repayment plan.
In short
A fixed loan payment is designed to clear the balance over the agreed term. Paying extra can reduce the interest paid and may shorten the repayment period, subject to the lender's terms.
What makes up a personal-loan repayment
A standard repayment usually includes interest and an amount that reduces the loan balance. With a fixed rate and fixed term, the required payment is calculated so the balance is repaid by the end of that term. The exact payment and total cost can change if fees or lender-specific charges apply.
Using extra repayments
An extra monthly repayment can reduce the balance ahead of schedule. This may reduce the total interest paid and shorten the repayment period. Before paying extra or settling early, check whether the agreement has an early-repayment charge, overpayment limit or other conditions.
Compare the full cost, not only the monthly payment
A longer term can lower the required monthly payment but may increase total interest. Compare the total repayment, not just the monthly figure, and leave room in the budget for essential expenses and unexpected costs.
Use the personal-loan calculator to compare the scheduled repayment with an extra-payment plan. It is a planning estimate, not a loan offer, financial advice or a lender affordability assessment.