Key takeaways
- Check the effective interest rate, fees and repayment schedule together.
- A lower monthly payment can mean a longer repayment period.
- Compare the same borrowing amount and tenure.
Know which rate you are reading
A flat rate calculates interest using the original loan amount. With a reducing-balance calculation, interest is based on the amount still outstanding. The same headline percentage can therefore produce different borrowing costs.
The effective interest rate (EIR) helps express the cost in a way that supports comparison. Ask the lender to explain both the quoted rate and EIR.
Read the repayment schedule
Look at the monthly payment and the total payable over the full term. A longer tenure can make instalments smaller while increasing the overall interest bill.
Check processing charges and other applicable fees too. Ask what happens if you miss a payment or settle early, as terms vary between products and providers.
Make your comparison consistent
- Use the same loan amount and repayment period.
- Record the cash you receive after any deductions.
- Compare the full repayment amount, including fees.
- Check that each instalment fits your budget.
Use Loanova’s calculator to explore estimates, then compare the actual lender offers.
Common questions
Is the calculator an offer?
No. It is an estimate. A lender’s assessed offer determines the actual rate, charges and repayment terms.
Further reading
General information only. Product availability, eligibility and terms vary by provider. These guides do not promise approval or a particular offer.
