Loan Comparison Calculator Australia
A Loan Comparison Calculator helps you compare two different loan options side by side so you can see which one may save you money over the life of the loan. Whether you’re comparing home loans, personal loans, car loans or refinancing options, this calculator estimates monthly repayments, total interest paid and the overall cost of each loan.
Instead of comparing interest rates alone, a loan comparison calculator shows the real financial impact of each loan based on the amount borrowed, repayment period and interest rate. This makes it easier to understand which option offers better value.
How to Use Loan Comparison Calculator
Using the calculator only takes a few minutes.
- Enter the loan amount for both loans.
- Enter the interest rate for each lender.
- Select the loan term.
- Include any establishment fees if applicable.
- Click Compare Loans.
The calculator instantly displays:
- Monthly repayment for each loan
- Total interest payable
- Total repayment over the loan term
- Difference in borrowing cost
- Estimated savings by choosing the cheaper loan
Formula Used
Monthly repayments are calculated using the standard amortisation formula.
Loan Repayment Formula M=(1+r)n−1P×r(1+r)n
Where:
- M = Monthly repayment
- P = Loan amount
- r = Monthly interest rate
- n = Total number of monthly repayments
Example Comparison
Loan A
- Loan Amount: AUD 600,000
- Interest Rate: 6.20%
- Loan Term: 30 Years
Monthly repayment: ≈ AUD 3,675
Loan B
- Loan Amount: AUD 600,000
- Interest Rate: 5.90%
- Loan Term: 30 Years
Monthly repayment: ≈ AUD 3,558
Current Loan Offer
Alternative Loan Offer
| Metric | Current Loan Offer | Alternative Loan Offer |
|---|
Estimated saving:
- Around AUD 117 per month
- More than AUD 40,000 in interest over the life of the loan (approximate)
This example highlights why comparing loans before applying can make a meaningful difference to long-term borrowing costs.
What the Calculator Compares
A comprehensive Loan Comparison Calculator should compare:
- Loan Amount
- Interest Rate
- Comparison Rate
- Loan Term
- Monthly Repayment
- Total Interest
- Total Repayment
- Upfront Fees
- Ongoing Fees
- Total Cost of Borrowing
- Estimated Savings
Why Compare Loans?
Even a small difference in interest rates can have a significant impact over time.
For example, choosing a loan with an interest rate that's just 0.50% lower could potentially save thousands of dollars over a 25 or 30-year mortgage.
A comparison calculator helps you move beyond advertised rates by comparing the overall borrowing cost.
Factors That Influence Loan Costs
Several factors affect how much you'll ultimately repay:
- Interest rate
- Loan amount
- Loan term
- Extra repayments
- Offset account
- Redraw facility
- Establishment fees
- Ongoing fees
- Comparison rate
Comparing these features alongside repayments gives a more complete picture of each loan's value.
Frequently Asked Questions
What does a Loan Comparison Calculator do?
It compares two or more loans to estimate monthly repayments, total interest and the overall borrowing cost.
Can I compare home loans and personal loans?
Yes. The calculator can compare different loan products provided you enter the correct loan amount, interest rate and term.
Should I compare interest rates or comparison rates?
Comparison rates often provide a better indication of the true borrowing cost because they include certain fees and charges in addition to the interest rate.
Does the calculator include lender fees?
Only if you enter them. Some calculators allow you to compare establishment fees and ongoing charges.
Can this calculator help with refinancing?
Yes. It can estimate whether refinancing to another lender could reduce your repayments or total borrowing costs.
