How to compare personal loans: interest rate, comparison rate, fees and term

Last updated 3 November 2026 · Reviewed by 360 Asset Finance Compliance

What's the difference between the interest rate and the comparison rate?

The interest rate is what the lender charges you for borrowing the money. It's used to work out the interest on your loan balance.

The comparison rate combines the interest rate with most of the upfront and ongoing fees and charges into a single rate. It's designed to show something closer to the true cost of a loan, so two loans with different rates and fees can be compared more easily. When a lender advertises an interest rate on a personal loan, it generally has to show a comparison rate as well.

Why isn't the comparison rate the whole story?

The comparison rate is worked out for a standard example loan amount and term. It comes with a warning that it's true only for that example and may not include all fees and charges. That means:

• if you borrow a different amount or over a different term, your actual cost can be different
• fees that may or may not happen, such as late payment or early repayment fees, aren't included
• government charges aren't included.

Use it as a starting point, then check the full list of fees and the total amount you'll repay.

Fixed or variable: what's the difference?

With a fixed rate, the interest rate stays the same for the term, so your repayments are predictable. Some fixed loans charge a fee if you pay the loan off early.

With a variable rate, the interest rate can go up or down, so your repayments can change. Variable loans may give you more flexibility to make extra repayments.

Not every lender offers both. Think about whether certainty or flexibility matters more to you.

What fees should I look for?

• Establishment fees: charged when the loan is set up.
• Ongoing fees: such as regular account-keeping or service fees for the life of the loan.
• Early repayment or exit fees: charged if you pay the loan off before the end of the term.
• Late payment fees: charged if a repayment is missed or late.
• Broker fees: a broker must give you a credit guide that explains how it's paid and any fees for its service.

Ask for a full list of fees in writing, and read the contract documents before you sign.

How does the loan term change the cost?

The term is how long you have to repay the loan. A longer term lowers each repayment but can mean paying more interest overall. A shorter term means higher repayments but usually less interest in total. Choose a repayment you can manage, then look at the total you'll repay.

What else should I compare?

• Secured or unsecured: a secured loan uses an asset as security, and the two types may be priced differently.
• Extra repayments: whether you can pay more than the minimum, and whether there's a fee.
• Repayment frequency: whether you can repay weekly, fortnightly or on another schedule that matches your pay.
• The total amount repaid: the clearest single figure for comparing the cost of loans with the same amount and term.

How does a broker help me compare?

We're not tied to one lender, so we can compare options across our panel. Personal loans are regulated credit, so responsible lending rules apply. We ask about your goals, income and expenses, and check that any loan we suggest meets your needs and that you can afford the repayments. We won't suggest a loan that doesn't meet your needs or that you can't afford to repay. The lender will then assess your application against its criteria.

FAQs

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. Finance is provided by the lender you choose and is subject to its lending criteria; fees and charges apply. 360 Asset Finance is a trading name of Kuone Consulting Pty Ltd (ABN 75 647 329 002), Australian Credit Licence 566705.