Why doesn't the lowest interest rate always win?

Because fees are part of the cost of a loan, and interest rates don't capture them. A lender advertising 7.49% p.a. with a $595 application fee and $15/month in account fees is charging you substantially more than the rate suggests. On a $25,000 loan over 5 years, those fees alone add $1,495 — the equivalent of roughly 0.6% p.a. in additional rate. The comparison rate and total cost figures capture fees alongside interest.

What should I compare beyond the interest rate?

Start with total cost — it's the single number that accounts for the rate, term, application fee, and ongoing fees together. Then check the comparison rate for a standardised apples-to-apples view. Beyond numbers, look at: whether the loan allows extra repayments without penalty, the early payout fee, whether the rate is fixed or variable, and the lender's approval speed and customer service.

Can I compare a fixed rate and a variable rate loan in this calculator?

Yes. Each loan has its own rate type toggle. The calculator runs both on their current entered rates — it does not model potential future rate movements on variable loans, because those are impossible to predict. Use the comparison rate and total cost as your primary metrics regardless of rate type. Variable rate loans typically allow unlimited extra repayments and lower early payout fees, which can make them significantly cheaper if you repay ahead of schedule.

What if the loan amounts are different?

The calculator allows different loan amounts per loan, because real-world quotes don't always match exactly. However, if amounts differ, total cost figures reflect different borrowing amounts — they're not an apples-to-apples comparison. The calculator flags this with an informational note. For the fairest direct comparison, enter the same loan amount for each loan.

How does the early payout fee affect the comparison?

The early payout fee is shown in the comparison table for reference, but it's not included in the total cost calculation — because it only applies if you choose to pay the loan off before the scheduled end date. If you plan to pay the loan off early, factor it in manually. A loan with a $1,000 early exit penalty may look cheaper on the standard comparison but be more expensive in practice if you refinance in year 3.

What does "Best Overall" mean?

Best Overall is assigned to the loan with the lowest total cost (total interest plus all fees over the full loan term). It's the objective cheapest-loan-on-price determination. If two or more loans are within $100 of each other on total cost, the calculator does not assign a Best Overall badge — instead it shows a "Too close to call" message, because a $100 difference over 5 years is immaterial and flexibility factors should drive the decision.

What should I do when results show "Too close to call"?

When two or more loans are within $100 of each other, the price difference is less than $1.70 per month. Shift your comparison to flexibility: which loan allows extra repayments without penalty? Which has the lower (or zero) early payout fee? Which lender has faster approval and better customer service? These factors will have more practical impact than a $100 cost gap over five years.

What's the difference between total interest and total cost?

Total interest is the sum of interest payments only — the cost of borrowing the principal. Total cost adds all fees on top: the application fee and the cumulative monthly fees over the loan term. Total cost is always higher than total interest unless the loan has no fees whatsoever. Always use total cost as your comparison metric, not total interest alone.

How does comparing loans with different terms work?

Each loan has its own term slider, so you can compare a 3-year and a 5-year loan side by side. A shorter-term loan will have a higher monthly repayment but will almost always have a lower total cost, because interest accrues for fewer months. When terms differ, total cost is the most useful comparison metric — comparison rates become less directly comparable across different term lengths.

Two Loans Walk Into a Calculator. Only One Walks Out.

You've got two or three loan offers in front of you. This Australian personal loan comparison calculator puts them side by side so you can see which one actually costs less — not which one has the lowest advertised rate, not which one has the smallest monthly repayment, but which one takes the least money out of your pocket from start to finish.

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Who this calculator is for

Borrowers who have received multiple personal loan quotes — banks, online lenders, or credit unions — and need to identify the genuinely cheapest offer before signing.
Anyone who suspects a low-rate loan with high fees might actually cost more than a higher-rate loan with no fees.
Borrowers comparing fixed and variable loan options who want total cost and comparison rate side by side.

What it calculates

Monthly repayment, total interest, total fees, and total cost for each loan in a single comparison table.
Comparison rate for each loan using the ASIC-standard IRR method.
"Best Overall" winner based on lowest total cost, with a dollar-value savings callout.
Automatic flags when loans differ in amount, when the lowest rate isn't the cheapest loan, or when results are too close to call.

Why it matters

The cheapest-looking loan is not always the cheapest loan. A 7.5% rate with a $595 application fee and $15/month in account fees can easily cost more over five years than an 8.2% rate with no fees at all. Monthly repayments tell a similar partial story. This calculator shows the number that actually settles the question: total cost over the life of the loan.

Loan Amount$20,000

Term5 years

Loan name

Rate9.99%

Monthly Fee$0

Establishment Fee$250

Loan name

Rate8.49%

Monthly Fee$10

Establishment Fee$395

Side-by-Side

Loan A

Loan B

Monthly

$425

$420

Total Cost

$25,741

$25,609

Total Interest + Fees

$5,741

$5,609

Best Overall

Loan B

Saves $131 over 5 years vs the most expensive option

Ready to find a deal that beats all three?

Your best comparison is only as good as the quotes you start with. LoanGorilla shows you personalised rates from 30+ Australian lenders — you might find an offer that wins before it even reaches this calculator.

Check personalised personal loan rates Or dig into a single loan's true cost →

How this Loan Comparison Calculator works

This calculator takes the details of each loan offer and runs a complete financial analysis — not just a rate comparison, but a full accounting of every dollar you'd pay from the first repayment to the last.

Monthly repayment is calculated using the standard annuity formula used by Australian lenders:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]

where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. Each instalment covers accruing interest first, with the remainder reducing principal.

Total interest is the difference between the sum of all monthly repayments and the original loan amount. A longer term lowers the monthly repayment but increases total interest — one of the most important trade-offs the comparison table makes visible.

Total fees are the application fee plus monthly fees × number of months. Total fees plus total interest = total cost, the single most useful number for comparing loans. The early payout fee is displayed separately because it only applies if you exit early.

The comparison rate uses the Internal Rate of Return (IRR) method — the rate that makes the present value of all repayments (including fees) equal to the loan amount, per the Corporations Regulations 2001. The "Best Overall" badge goes to the loan with the lowest total cost. If two are within $100 of each other, the result is flagged as too close to call on price alone.

How to interpret your results

Total cost is the most important row. It tells you which loan costs the least over its full life, accounting for rate, term, application fee, and ongoing fees together. This is what "Best Overall" is based on.
The comparison rate is the best tool for ranking loans with similar structures. For loans with identical terms and amounts, the lowest comparison rate is the cheapest. For different terms or amounts, total cost is the more reliable guide.
A lower monthly repayment doesn't mean a cheaper loan. It often reflects a longer term — more months of interest accruing. The loan that hurts least each month can hurt most overall.
"Best Overall" vs "Too close to call". When two loans are within $100 of each other (less than $1.70/month over 5 years), price won't separate them — shift the decision to flexibility.
The different-loan-amounts flag matters. If amounts differ, total cost figures aren't apples-to-apples. For a fair comparison, enter the same loan amount across all loans.

How to choose between similar loans

If total cost difference is under $200, choose the more flexible loan. That margin is less than $3.50/month and can be erased by a single missed-payment penalty or redraw fee.
Check early payout conditions carefully. A $0 early payout fee gives you an exit without penalty. A $500–$1,500 break fee is a commitment. If there's any reasonable chance you'll exit early, factor that fee into your total cost from day one.
Understand what "variable" means for your situation. Variable rate loans typically allow unlimited extra repayments and lower or no early payout fees. Fixed loans give payment certainty for the full term — valuable on a tight budget.
Ask what happens if you miss a payment. Some lenders charge a flat $15 fee. Others trigger a penalty rate adding 3–5% p.a. for the following period. Hardship policies matter as much as headline rates.
If one loan is from your existing bank, investigate bundling benefits. Some lenders offer rate discounts or fee waivers for existing customers — but only if confirmed in writing.
Use the comparison rate calculator to dig deeper into any single loan once this tool identifies your likely winner.

The win is not picking the loan with the best-looking number on the lender's homepage; it's finding the loan with the lowest total cost that still gives you the flexibility your financial situation requires.

Example Loan Comparison Calculations in Australia

A realistic three-way comparison across common lender types, $25,000 loan over 5 years. Calculated May 2026.

Metric	Big Bank (Loan A)	Online Lender (Loan B)	Credit Union (Loan C)
Advertised rate	7.49% p.a.	8.25% p.a.	7.99% p.a.
Application fee	$595	$0	$200
Monthly fee	$15/month	$0/month	$8/month
Monthly repayment	~$503	~$511	~$508
Total interest	~$5,175	~$5,660	~$5,460
Total fees	$1,495	$0	$680
Total cost	~$6,670	~$5,660 ✓	~$6,140
Comparison rate	~9.81% p.a.	8.25% p.a.	~8.73% p.a.

You'd save $1,010 by choosing the online lender over the big bank — despite the big bank having the lowest advertised rate. Loan B wins because it has no fees.

Assumptions

Loan amount $25,000 | Term 5 years (60 monthly payments).
Monthly repayment via standard annuity formula on advertised rate.
Comparison rate via IRR method per Corporations Regulations 2001 Schedule 4.
Early payout fee $0 for all scenarios.
Figures illustrative as of May 2026 — actual rates and fees vary.

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Calculator assumptions

This calculator provides estimates based on the inputs you enter. Monthly repayments use the standard annuity (P&I) formula consistent with how Australian lenders calculate fixed repayment schedules. Total cost is the sum of total interest and total fees over the full loan term, assuming you hold each loan to its scheduled end date. The comparison rate uses the IRR method under the Corporations Regulations 2001 (Schedule 4), applied to your specific loan inputs. For loans with different amounts or terms, comparison rates are less directly comparable — total cost is a more reliable guide. Variable rate loans are modelled on the current rate entered; future rate movements are not forecast. Early payout fees are displayed in the comparison table but are not included in total cost, as they are contingent on early repayment. All figures in AUD; rates indicative as of May 2026 and subject to change. This calculator does not constitute financial advice. Reviewed by the LoanGorilla editorial team — last updated May 2026.