How are Loans Calculated?
Loans are calculated on the amount you wish to borrow and the interest rate that is given to you by the lender. This interest rate is dependent on the amount borrowed, the personal information you provided and your credit history. Lenders also take security into account when determining the full loan amount, as offering security can significantly reduce your interest rate.
How the loan is calculated
You take the amount you wish to borrow and add the interest (dependent on rate) to the loan, so it comes to one lump sum. This amount is then divided equally in repayments amongst the given loan term in the frequency (weekly, fortnightly or monthly) that you requested.
Loan calculation example:
Loan Amount $10,000
Interest Rate: 12.95%
Term of Loan: 3 Years (36 months)
Total Loan repayment: 12,047.12 (excluding $245 application fee)
Loan Interest: $2,047.12
Weekly Repayment: $77.23