Loan Repayment Calculator – FAQs

General Questions

What is a personal loan calculator?
A personal loan calculator helps you estimate your loan repayments based on the amount you want to borrow, the loan term, and the interest rate. It shows you exactly what your weekly, fortnightly, and monthly payments would be.

How does the personal loan calculator work?
Our calculator uses standard loan amortization formulas to calculate your repayments. When you adjust the sliders for loan amount, term, or interest rate, it instantly recalculates your payments across all frequency options.

Why should I use a personal loan calculator before applying for a loan?
Using a calculator helps you:

• Understand what you can afford to borrow

• Compare different loan scenarios

• Choose the right repayment frequency for your budget

• Avoid overcommitting financially

• Negotiate better terms with lenders

Calculation Questions

How are the repayments calculated?
Repayments are calculated using the amortization formula that spreads the loan amount plus interest evenly over your chosen term. The formula ensures the loan is fully repaid by the end of the term, accounting for compound interest.

What’s the difference between weekly, fortnightly, and monthly repayments?

• Weekly: 52 payments per year – can help you budget better if you’re paid weekly

• Fortnightly: 26 payments per year – aligns well with many pay cycles in NZ

• Monthly: 12 payments per year – traditional payment schedule

Why do the total costs change when I adjust the sliders?

• Higher loan amount = higher repayments and more total interest

• Longer loan term = lower regular repayments but more total interest

• Higher interest rate = higher repayments and more total interest

Does the calculator include any fees or charges?
No, this calculator focuses on principal and interest repayments only. Actual personal loans may include establishment fees, monthly account fees, and early repayment fees.

NZ-Specific Questions

What are typical personal loan interest rates in New Zealand?
Interest rates vary based on:

• Your credit score and history

• Loan amount and term

• Whether the loan is secured or unsecured

• Lender policies and current market rates

Rates typically range from 6% to 30% depending on these factors.

What loan terms are available for personal loans in NZ?
Most lenders offer terms from 6 months to 7 years, with 1-5 years being the most common for personal loans.

What can I use a personal loan for in New Zealand?
Common uses include:

• Debt consolidation

• Home renovations

• Vehicle purchases

• Medical expenses

• Holidays or travel

• Wedding costs

• Major purchases

What documents do I need for a personal loan application in NZ?
Typically you’ll need:

• Proof of identity (driver’s license or passport)

• Proof of income (recent payslips or bank statements)

• Proof of address

• Details of your regular expenses

Budgeting & Strategy Questions

How much should I borrow?
Only borrow what you need and can comfortably afford to repay. A good rule is that your total loan repayments shouldn’t exceed 20-30% of your take-home pay.

Should I choose a shorter or longer loan term?

• Shorter term: Higher regular repayments but less interest overall

• Longer term: Lower regular repayments but more interest paid over time

What repayment frequency should I choose?
Choose the frequency that matches when you get paid. If you’re paid weekly, weekly repayments might be easier to manage. The calculator shows all options so you can compare.

How can I reduce the total interest I pay?

• Borrow only what you need

• Choose the shortest term you can afford

• Make extra repayments when possible

• Shop around for the best interest rate

Technical Questions

Why might my actual bank repayments be different from the calculator?
Banks may use slightly different calculation methods or include additional fees. The calculator provides estimates – always get official quotes from lenders for precise figures.

What is compound interest in personal loans?
Compound interest means you pay interest on both the original loan amount and any accumulated interest. Our calculator accounts for this in its calculations.

Can I calculate both secured and unsecured loans?
Yes, the calculator works for both. Just adjust the interest rate slider to reflect the type of loan you’re considering (secured loans typically have lower rates).

How accurate are the results?
The calculator provides close estimates based on standard loan formulas. For exact figures, consult with your lender as terms can vary.

Lender Questions

What’s the difference between secured and unsecured personal loans?

• Secured: Backed by an asset (like a car) as collateral, usually lower interest rates

• Unsecured: No collateral required, typically higher interest rates

How long does it take to get approved for a personal loan in NZ?
Approval times vary by lender but can range from a few hours to several days once all documents are submitted.

Can I pay off my personal loan early?
Most lenders allow early repayment, but some may charge early repayment fees. Check the terms before signing.

What credit score do I need for a personal loan?
Requirements vary by lender, but generally a credit score above 600 improves your chances of approval and better rates.