How interest rates and comparison rates work
What the headline rate leaves out, and how a comparison rate folds fees back in.
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Rate education · Australia
Understand the rate before you sign for it.
Clear guides on interest rates, comparison rates and fees, plus a repayment calculator you can use without handing over a single detail.
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General information only. All figures are illustrative examples, not offers.
Example repayment
$608.29 / month
$30,000 over 5 years at 8.00% p.a., no balloon, no fees
Interest, 3 yrs
$3,843.27
Same loan, shorter term
Interest, 7 yrs
$9,277.26
Same loan, longer term
The takeaway
A lower repayment from a longer term usually means more interest overall. Tiles are illustrative examples.
Where would you like to start?
Start with the basics
All rate guides →Fixed vs variable rates
Certainty or flexibility? A worked example shows what a rate rise does to repayments.
Read the guideWhat affects the rate you are offered
Security, credit history, loan size and term: how lenders weigh risk.
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How lenders price risk: the building blocks behind your rate
A loan rate is not a single number plucked from the air. It is built from layers, and risk is only one of them.
Secured vs unsecured loans: what the rate gap looks like in dollars
Putting an asset behind a loan usually brings the rate down. A $25,000 example shows how much that can matter.
Balloon payments: lower repayments, bigger final bill
A balloon or residual shrinks your monthly repayment, but it also changes how much interest you pay. Here is the trade-off in dollars.
Run your own numbers
Enter an amount, rate, term and optional balloon to see an illustrative repayment and the total interest. It runs in your browser; nothing is sent anywhere.
Open the calculatorGot something to sell?
Selling an item you no longer need can reduce how much you have to borrow, and every dollar not borrowed is a dollar not charged interest.
See how it worksReady to look at real options?
This site explains how loans work. When you want to see what could be available for your situation, our finance partner can take your enquiry. No obligation to proceed.
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Is this a lender?
No. Low Rate Funding is an education website. It does not lend money, give personal advice or approve applications.
Are the rates on this site real offers?
No. Every rate and repayment shown is an illustrative example used to explain how loans work. Actual rates depend on the lender and your circumstances.
When you are ready to look at real options, you can start an enquiry through our finance partner.