Loan Comparison Calculator

When comparing loans in New Zealand, the most important step is to look beyond the advertised interest rate and focus on the total cost of the loan over its full term. Gather quotes from multiple lenders — banks, credit unions, and non-bank lenders — and request a breakdown that includes the interest rate, all fees (establishment, monthly, early repayment), and the total repayment amount. Use the annual percentage rate (APR) or comparison rate, which incorporates fees into a single figure, to make a like-for-like comparison. Online loan comparison tools and the sorted.org.nz calculator can help. Also consider loan flexibility: can you make extra repayments? Is there a redraw facility? Factor in any break fees for fixed-rate loans. The Credit Contracts and Consumer Finance Act (CCCFA) requires NZ lenders to disclose all costs upfront. Source: Commerce Commission NZ; sorted.org.nz.

A comparison rate (sometimes called an APR or annual percentage rate) is a standardised interest rate that combines a loan's headline interest rate with most of its fees and charges, expressed as a single annual percentage. This makes it easier to compare the true cost of loans from different lenders on a like-for-like basis. For example, a loan advertised at 8.5% with high establishment fees might have a comparison rate of 10.2%, while a loan at 9% with no fees might have a comparison rate of 9%. The higher the fees, the bigger the gap between the nominal rate and the comparison rate. In New Zealand, the CCCFA requires lenders to disclose the total cost of credit, though "comparison rate" as a specific term is more commonly used in Australia. Always ask your NZ lender for the total interest payable and total repayment amount over the loan term. Source: Commerce Commission NZ — CCCFA; sorted.org.nz.

Choosing between a shorter or longer loan term in New Zealand involves a trade-off between monthly affordability and total interest paid. A shorter loan term means higher monthly repayments but significantly less total interest over the life of the loan. A longer term reduces monthly repayments, making the loan more manageable week to week, but dramatically increases the total amount you repay. For example, a $20,000 personal loan at 12% over 3 years costs about $6,640 in total interest and repayments of $664/month; the same loan over 7 years costs about $16,200 in total interest but only $431/month. If you can comfortably afford the higher repayments, a shorter term is almost always the better financial choice. Use a loan comparison calculator to model different scenarios before committing. Source: sorted.org.nz — Loan Calculator.

The total interest cost over a loan's life is the sum of all interest payments you make from the first repayment to the last — the difference between the total amount repaid and the original principal borrowed. This figure is the most important number when comparing loans, far more meaningful than the monthly repayment alone. For example, a $30,000 car loan at 10.95% over 5 years has monthly repayments of about $649, but the total interest paid is approximately $8,940 — nearly 30% of the original loan amount. To reduce total interest paid, consider making extra repayments when possible, choosing a shorter term if affordable, and selecting the lowest rate available for your risk profile. New Zealand lenders are required under the CCCFA to disclose the total cost of credit in the loan agreement before you sign. Always ask for this figure and factor it into your comparison. Source: Commerce Commission NZ — CCCFA.